Supreme Infrastructure India Ltd Management Discussions

Global Economy Overview

The global economy in 2025 displayed tenuous resilience amid persistent uncertainty. According to the International Monetary Fund (IMF), global growth is projected at 3.0% in 2025, marginally higher than earlier forecasts, before edging up to 3.1% in 2026. The upward revision reflects stronger-than-expected front-loading of trade and investment in anticipation of tariff changes, easing global financial conditions, and fiscal expansion in some major economies.

Advanced economies are expected to grow by 1.5% in 2025, with the United States projected at 1.9% and the euro area at 1.0%. In contrast, emerging markets and developing economies remain more dynamic, with projected growth of 4.1% in 2025, led by China at 4.8% and India at 6.4%.

Global inflation continues to moderate, with headline inflation forecast to decline to 4.2% in 2025 and 3.6% in 2026, although divergences remain across economies. Inflation is expected to remain above target in the United States, while being more subdued in the euro area and several emerging markets.

Risks to the global outlook remain tilted to the downside. Rising trade policy uncertainty, potential tariff escalations, and geopolitical tensions could weigh on growth and disrupt supply chains. Fiscalvulnerabilitiesin major economies, along with climate-related and extreme weather events, add further layers of risk. On the upside, a breakthrough in trade negotiations or credible reforms could support investment and lift medium-term growth.

Despite these headwinds, the global economy remains resilient, with growth increasingly shaped by structural shifts in digitalisation, supply chain realignments, and the green transition.

Indian Economy Overview

India remained the fastest-growing major economy in FY 2024 25, with growth underpinned by resilient domestic demand, an upswing in investment and capacity utilisation, and continued public capital expenditure. The Reserve Bank of India (RBI) projects GDP growth at 6.5% in 2025 26, broadly unchanged from the previous year, supported by buoyant rural and urban demand, balanced contributions from consumption and investment, and favourable financial conditions.

Inflationary pressures moderated sharply during the year. state how was the inflation at end of FY in question, ie. March 2025, reflecting stabilising food and fuel prices, proactive supply-side interventions, and prudent monetary policy. Inflation is expected to remain aligned with the RBIs 4% target band in the near to medium term.

The external sector remained resilient. The current account deficit narrowed to 0.6% of GDP in FY 2024 25, with Q4 recording a surplus of 1.3% of GDP, supported by robust services exports and record remittances. Foreign exchange reserves reached US$697.9 billion (June 2025), covering more than 11 months of imports, while external debt remains modest at 19.1% of GDP, providing a strong buffer against global volatility.

On the fiscal side, the Union Budget 2024 25 emphasised fiscal consolidation while maintaining an expansionary capital expenditure path. Outlays were set at 11.1 lakh crore (3.4% of GDP), crowding in private investment and reinforcing infrastructure development. Key reforms included the roll-out of Unique Land Parcel Identification (Bhu-Aadhaar) and digitisation of urban land records, expected to improve transparency, enhance ease of doing business, and support real estate and infrastructure growth. Government debt remains predominantly rupee-denominated with longer maturities, underpinning sustainability.

Employment and formalisation trends also remained encouraging. GST buoyancy and rising digital payment adoption expanded the formal economy, while job creation in construction,services, and manufacturing reflectedthemultiplier effect of infrastructure spending.

Looking ahead, Indias medium-term outlook is positive, supported by structural reforms, rapid digital transformation, green energy demographic strengths. Risks persistfromglobaltradefrictions,geopoliticaluncertainties, and climate variability, transition, but India is expected to remain a key driver of global growth, contributing over 15% of global expansion in 2025 26.

Indian Infrastructure Overview

Indias infrastructure sector continues to be a vital growth driver, underpinning economic development, industrialisation, and job creation. The sector accountsfornearly7 8%ofthenationsGDPandhasastrongmultiplier effect on employment, productivity, and investments.

A cornerstone of this expansion is the PM Gati Shakti National Master Plan (NMP) an integrated, GIS-enabled digital platform launched in October 2021. The platform brings together 16 central ministries (including Railways, Roadways, and Civil Aviation) to synchronise planning and execution of infrastructure projects across multiple modes of transport. By facilitating last-mile connectivity, reducing travel times, and promoting multi-modal integration across schemes such as Bharatmala, Sagarmala, UDAN, and Inland Waterways, Gati Shakti seeks to transform logistics efficiency and regional accessibility.

One of the most significant programmes under this vision is the Bharatmala Pariyojana (Phase-I), spearheaded by the Ministry of Road Transport and Highways and implemented by the National Highways Authority of India (NHAI). With an ambitious target of developing 34,800 km of national highway corridors at an estimated cost of 5.35 lakh crore, Bharatmala also subsumes residual projects from the National Highways Development Project (NHDP). As of 30 November 2024, projects covering 26,425 km had been awarded and 18,926 km completed, with cumulative expenditure of 4.72 lakh crore.

The Governments sustained thrust is also reflected in the Union Budget 2024 25, which allocated a record 11.1 lakh crore towards capital expenditure a 16.9% year-on-year increase, equivalent to 3.4% of GDP. The allocations prioritise roads, railways, airports, irrigation and flood management, and urban infrastructure, alongside the launch of Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY), which will provide all-weather road connectivity to nearly 25,000 rural habitations.

In addition,the Budget announced next-generation reforms in land management through the rollout of Unique Land Parcel Identification Number (Bhu-Aadhaar), digitisation of cadastral and urban land records with GIS mapping, and creation of an integrated land registry. These reforms are expected to improve transparency, ease land acquisitionfor infrastructure projects, and attract climate finance for sustainable development.

Importantly, Indias infrastructure roadmap is increasingly aligned with sustainability goals, emphasising renewable energy, green hydrogen, urban transport electrification, and resilient design to mitigate climate risks. Supported by a blend of public investment, private sector participation, and regulatory reforms, the sector remains central to realising Indias long-term growth ambitions enhancing connectivity, reducing logistics costs, accelerating industrialisation, and reinforcing Indias role as a global growth engine.

Policy-Driven Institutional Framework

The PM Gati Shakti NMP delivers a transformational impact by integrating planning across ministries advanced GIS-based decision tools. It includes features for prioritisation, optimisation, and dynamic project monitoring. Over 27 central government ministries and 36 States/UTs have adopted the platform, enabling real-time coordination and expedited issue resolutionvia the Project Monitoring Group (PMG) interface.

Bharatmala Implementation & EPC Opportunity

Under Phase-I of Bharatmala, approximately 30,257 km of highway projects have been entrusted to agencies like NHAI through EPC, BOT, and HAM models, with significant capital outlays National Highways Authority of India. This wide-scale contracting creates ample execution opportunities for EPC players across project types including economic corridors, expressways, national corridors, and port connectivity networks National Highways Authority of India.

Strategic Implications for EPC Firms

These developments collectively shape the industry structure:

1. Enhanced Project Pipeline: Government-backed infrastructure corridors and expressways significantly expand opportunities for EPC contractors.

2. Integrated Execution Ecosystem: Gati Shakti promotes cross-ministry collaboration, accelerating clearances and coordination.

3. Digital-First Planning: GIS and analytics tools support efficient

4. Segment Diversity: Projects range across highways, tunnels, expressways, and rail corridors offering varied traction capabilities.

Summary Table

Risk Management

The Company recognises that systematic evaluation and management of risks are essential to and delivering value to shareholders. Risks are assessed at regular intervals, and mitigation measures are undertaken in line with sectoral challenges.

Key risks include:

1. Land acquisition delays : Encumbrance-free land and Right of Way are often handed over late, leading to project delays and idling of resources.

2. Commercial pressures: Increasingly stringent contract terms exert pressure on working capital.

3. Regulatory and approval delays: Prolonged timelines for statutory approvals create a domino effect on project schedules.

4. Climate and environmental risks: Extreme weather events, such as unprecedented rainfall, and construction the National Green Tribunal (NGT) on pollution grounds pose significant The Company continues to develop appropriate strategiestomitigatetheserisksandensurebusinesscontinuity.

Internal Controls

The Company has an internal control framework that is commensurate with its scale, sector, and geographical spread, designed to safeguard assets, ensure reliable financial reporting, and promote compliance with applicable laws and regulations. Key features of the framework include:

1. Policies and processes: Well-defined policies, processes, and systems that are monitored regularly by senior management. Any deviations are promptly addressed and rectified.

2. Financial reporting reporting system :Arobustfinancial supported by a Management Information System (MIS) to monitor operational expenditure against budgeted allocations.

3. Internal audit and oversight: A structured internal audit programme,reviewedbytheAuditCommittee, ensures effectiveness of controls and accountability.

4. Ethics and governance es are reinforced through a ‘Code of Conduct for employees and a practic :CorporateGovernance separate ‘Code of Conduct for business partners. These align behaviour with the Companys values and corporate culture.

5. Whistle-blower mechanism: An accessible and confidential mechanism allows employees and business partners to report genuine concerns about ethical, legal, or compliance issues, with safeguards against victimisation or

6. Workplace protections : A committee has been constituted under the Companys Policy for Protection of Womens Rights at Workplace, in compliance with statutory requirements. The policy is widely communicated, and complaints are addressed in a time-bound manner.

This framework collectively strengthens transparency, accountability, and governance across the organisation.

Training and Talent Management

People are central to the Companys growth and performance. Human resource policies are designed to support professional development, career progression, and employee well-being.

The Company also leverages digital tools to enhance workplace efficiency and learning. For instance, digitalisation initiatives have enabled delivery of structured learning experiences, equipping employees with relevant skills to adapt to changing business requirements.

Sustainable Development

The Company recognises the importanceofintegratingsustainability into its core operations. Guided by its Health, Safety and

Environment (HSE) Policy, the Company works towards minimising environmental impact through efficient resource utilisation, effective waste management, and pollution control measures. Efforts are also directed towards enhancing workforce safety, promoting awareness among employees and contractors, and ensuring compliance with all applicable environmental and social regulations. By aligning business growth with sustainable practices, the Company aims to create long-term value for stakeholders positi whilecontributing

Outlook

The global and domestic environment continues to evolveamidst opportunitiesand challenges. Global growth complexmixof is expected to remain steady but uneven, shaped by shifting trade policies, realignments in supply chains, inflationary pressures in select economies, and climate-related risks. While uncertainties geopoliticaltensions may weighincommoditymarketsand on near-term prospects, accelerated adoption of digital technologies and the green transition provide a strong foundation for sustainable, long-term growth.

For India, the outlook remains positive. Sustained public investment in infrastructure, supported by the Union Governments record capital expenditure outlay, and structural reforms such as PM Gati Shakti and Bharatmala are expected to generate strong demand urbanisation, growing industrial corridors, and initiatives in renewable energy and for engineeringandconstruction green mobility are likely to create multi-year opportunities for the infrastructure sector.

Against this backdrop, Supreme Infrastructure India Limited is positioned sector presence and execution leverageitsmulti-continue to prioritise margin discipline, prudent risk management, and sustainable practices, while expertise. capitalising on the opportunities presented by Indias infrastructure push. The recent approval of the Composite Scheme of Arrangement by the Honble NCLT, which has significantly strengthened the Companys balance sheet, further enhances our ability to pursue growth with confidence.

Looking ahead, we remain committed to delivering long-term value for all stakeholders by aligning growth with sustainability, governance, and innovation, and by contributing meaningfully to Indias nation-building agenda.

Ratios

Cautionary Statement

This report contains statements regarding expected future events, financial and operating results of the Company, which are forward-looking in nature. Such statements are based on assumptions and are subject to inherent risks and uncertainties. Actual outcomes may differ materially from those expressed or implied.

Readers are advised not to place undue reliance on forward-looking statements, as several external and internal factors may cause variations in actual performance. This section should be read in conjunctionwith the risk factors and qualifications outlined in the Managements Discussion and Analysis of the Companys Annual Report for FY 2024 25.