Suyog Gurbaxani Funicular Ropeways Ltd Management Discussions

Global Economic Overview

The global ropeway and cable car industry has been witnessing significant growth, driven by increasing urbanization, rising tourism, and the need for sustainable transportation solutions. Ropeways are being adopted not only as tourist attractions but also as eco-friendly public transport systems in hilly and congested regions worldwide. Countries in Europe, South America, and Asia have already established ropeway systems as alternative mobility solutions. The emphasis on reducing carbon emissions and fuel consumption has further accelerated investments in ropeway infrastructure globally.

In the tourism and pilgrimage sector, ropeways are playing a pivotal role in improving accessibility to remote destinations, shrines, and hill stations. Global case studies highlight their ability to reduce travel time, provide safety, and boost local economies by increasing visitor inflows. Funicular and ropeway systems are also gaining acceptance for last-mile connectivity in urban areas, easing traffic congestion and complementing metro and bus networks. This trend is expected to continue with governments encouraging public-private partnerships and foreign investments in infrastructure.

The industry is also benefiting from advancements in technology, including automated control systems, enhanced safety mechanisms, digital ticketing, and energy-efficient operations. Many global players are focusing on developing ropeways with higher passenger capacity, durability, and minimal environmental impact. With climate sustainability becoming a key agenda, ropeways are considered a green mode of transportation with lower land disturbance compared to conventional road projects. These factors make ropeways a vital part of future mobility planning.

The Indian ropeway and cable car market is emerging as one of the fastest growing segments in the countrys infrastructure sector. With increasing focus on boosting tourism, decongesting urban centers, and improving connectivity in hilly terrains, ropeways are being promoted as a safe, efficient, and eco-friendly mode of transport. The Government of India has identified ropeways as a priority sector and is actively encouraging investments through public-private partnership (PPP) models.

The launch of the National Ropeways Development Programme - Parvatmala Pariyojana under the Ministry of Road Transport and Highways is a key milestone for the sector. The programme aims to develop ropeways across India to improve mobility, particularly in difficult-to-access regions, tourist hubs, and pilgrimage centers. Several ropeway projects have already been awarded under this initiative, and more projects are in the pipeline, creating a robust opportunity landscape for developers like SGFRL.

The Indian tourism sector, a major driver of ropeway demand, continues to grow rapidly with increasing domestic travel and government-backed infrastructure upgrades. Ropeways are becoming a preferred mode to provide last-mile connectivity to religious shrines, hill stations, and adventure tourism destinations. At the same time, states such as Uttarakhand, Himachal Pradesh, Maharashtra, and Jammu & Kashmir are increasingly adopting ropeways as sustainable alternatives to road expansion projects in fragile ecosystems.

Rising awareness of environmental sustainability is also shaping the demand for ropeways in India. Ropeway projects require minimal land acquisition, have lower carbon emissions, and cause less ecological disturbance compared to traditional road construction. This makes them particularly attractive for hilly and forested regions, aligning well with Indias climate commitments. With growing policy support and positive public acceptance, ropeways are set to become a critical part of Indias transport and tourism infrastructure.

Against this backdrop, SGFRL is strategically placed to leverage its experience and expertise in developing and operating funicular ropeways. With its successful execution of Indias first funicular ropeway project at Saptashrungi Gad, the Company has built a strong foundation to expand into other geographies and projects being rolled out under the Parvatmala Pariyojana. This positions SGFRL to benefit directly from the expanding Indian ropeway market over the coming years.

The outlook for the ropeway industry in India remains highly positive, supported by strong government initiatives, rising tourism, and growing acceptance of ropeways as an efficient mobility solution. Under the Parvatmala Pariyojana, the Government aims to develop multiple ropeway projects across hilly and pilgrimage regions, offering significant opportunities for private players. This programme, along with state-level tourism development policies, is expected to accelerate the adoption of ropeways in the country.

For Suyog Gurbaxani Funicular Ropeways Limited, the successful development of the funicular ropeway at Saptashrungi Gad Temple provides both credibility and expertise to explore new projects. With increasing emphasis on public-private partnerships, the Company is well-positioned to bid for upcoming ropeway developments across India. Its prior experience in handling regulatory, technical, and operational challenges offers a competitive edge in scaling operations.

Looking ahead, SGFRL plans to strengthen its presence in the ropeway sector by targeting new projects in pilgrimage centers, tourist destinations, and urban mobility solutions. The Company will also focus on adopting advanced technology, enhancing passenger safety, and building sustainable infrastructure in line with global best practices. With supportive government policies, rising domestic travel, and favorable market trends, SGFRL anticipates robust growth opportunities in the medium to long term.

The ropeway and funicular industry in India, while offering immense opportunities, is also exposed to certain risks that may affect growth and operations. One of the key risks is the regulatory and approval process, as ropeway projects require multiple clearances from central, state, and local authorities. Any delay in obtaining approvals or change in government policies can impact project timelines and cost structures.

Another area of concern is project financing and capital intensity. Ropeway projects involve significant upfront investment in construction, technology, and safety infrastructure. Delays in financial closure or cost escalations due to inflation and foreign exchange fluctuations in imported equipment can affect project viability. Availability of long-term financing at competitive rates remains a critical success factor for developers like SGFRL.

Operational risks are also relevant, particularly for ropeways operating in hilly terrains and high-traffic pilgrimage destinations. Factors such as natural calamities, adverse weather conditions, and mechanical failures could disrupt operations. Ensuring robust maintenance, trained manpower, and adherence to global safety standards is essential to minimize these risks and maintain passenger confidence.

The Company is also exposed to market risks related to variations in tourist footfalls and changing consumer preferences. While ropeways at pilgrimage centers tend to have consistent demand, external factors such as pandemics, travel restrictions, or regional disturbances can reduce passenger inflows. Continuous monitoring of demand trends and diversifying project locations can help mitigate such risks.

Lastly, increasing emphasis on environmental and social concerns requires ropeway developers to adopt ecofriendly practices and engage with local communities. Resistance from stakeholders or concerns regarding ecological sensitivity of project sites could delay implementation. SGFRL recognizes these risks and is committed to sustainable practices, compliance with regulations, and transparent stakeholder engagement to minimize potential challenges.

The Company has in place adequate internal control systems commensurate with its size and nature of operations, ensuring accuracy in financial reporting, safeguarding of assets, operational efficiency, and compliance with applicable laws and regulations. Internal audits are conducted periodically by independent auditors, and the findings along with corrective actions are reviewed by the management and monitored by the Audit Committee of the Board. The Company has also implemented structured digital systems, including the Structured Digital Database (SDD) as mandated under SEBI (PIT) Regulations, thereby strengthening compliance, enhancing transparency, and minimizing risks of manual lapses. Overall, the Board believes that the internal control framework is robust, effective, and continuously upgraded to meet evolving business and regulatory requirements.

• Government-Backed Infrastructure Push: Schemes like Parvatmala Pariyojana are providing unprecedented opportunities for ropeway developers.

• Tourism Revival: With increasing domestic travel and spiritual tourism, especially post-pandemic, SGFRLs presence in religious sites is strategically beneficial.

• Urban Transport Alternatives: Ropeways as a solution for congested cities offer long-term opportunities in urban mobility.

• Technological Innovation: Adoption of advanced automation, energy-efficient motors, and safety controls can improve SGFRLs operational efficiency and lower lifecycle costs.

• Sustainable Transportation: Ropeways are eco-friendly and cost-effective, aligning with Indias net-zero and green development targets.

Suyog Gurbaxani Funicular Ropeways Limited delivered a strong performance in FY 2024-25, reflected in a stellar Return on Equity (ROE) of 35.52%, significantly higher than its five-year average of -0.42%. Despite a topline contraction?with sales declining by 16.07% year-on-year?EBITDA rose to 17.50 crore, up from 15.16 crore in FY 2023-24. Operating cash flow stood at 3.63 crore, approximately 0.42 times the reported net profit of 8.69 crore. The company incurred interest expenses at 5.16% and employee costs at 13.69% of operating revenues. These figures underscore effective asset utilization and cost controls, even in the face of revenue pressure.

• Mahur Gadh (Maharashtra) and Haji Malang Dargah (Kalyan) ropeway projects are progressing steadily.

• Proposed developments at Jejuri (Maharashtra) and Diu-Daman (Gujarat) are under active planning and regulatory stages.

Human resources are a focus area for the Company. Effective utilization of the human resources is done through reward and recognition of talent and rationalization of non-performers. Our employee strength was 304 as on 31st March, 2025.

(Rs. in Crore)

This report may contain forward-looking statements based on certain assumptions and expectations. Actual results may differ materially due to economic developments, regulatory changes, project delays, natural disasters, and other unforeseen factors. SGFRL assumes no obligation to update or revise these statements based on future events or developments.