Steel Strips Infrastructures Ltd Management Discussions

Infrastructure is the fundamental backbone of economic development. It drives growth by reducing logistics costs, boosting productivity, creating jobs, and connecting local businesses to global markets. Without robust foundational systems, it is incredibly difficult for industries to scale or for living standards to improve. It has witnessed considerable progress in the past few decades.

Indias macroeconomic trajectory in FY2025-26 remained one of the most compelling narratives in the emerging-market universe. The Government of India sustained its capital expenditure push at 11.11 lakh crore in the Union Budget 2025-26, representing approximately 3.4% of GDP a figure that has more than trebled in nominal terms over five years. PM GatiShakti, the National Infrastructure Pipeline, and the sustained thrust on national highways, urban metro rail corridors, and Tier-II city development have collectively reconfigured Indias built-environment investment thesis.

Against this macro backdrop, the operational reality confronting smaller, asset-holding real estate entities such as Steel Strips Infrastructures Limited (hereinafter SSIL or the Company) involves an entirely distinct set of structural constraints. The Companys revenue base anchored in rental income and maintenance fees from its flagship SAB Mall asset in Noida, Uttar Pradesh remained range-bound at 1.36 crore in FY2025-26, exhibiting the low-velocity income characteristics of a mature, partially-occupied commercial real estate holdco. The macroeconomic tailwinds have not yet translated into micro-level monetization acceleration for SSIL, and Managements posture throughout FY2025-26 has been shaped accordingly.

Construction sector in India is expected to grow by 6.4% in real terms by 2026 driven by substantial investments in transport, infrastructure and energy projects. Looking towards the future, the Indian construction industry is expected to maintain a 6% average annual growth rate from 2027 to 2030. This sustained growth is supported by government initiatives focusing on manufacturing, infrastructure, and energy projects. Notably, the government aims to integrate 500GW of non-fossil fuel electricity generation capacity by 2030 and extend an additional 17,000 km of expressways by 2033. A new high-speed road network, valued at INR11.2 trillion ($124.9 billion), is also planned for completion by 2033, indicating robust investment in transportation infrastructure. West Asian war and disruptions in the Strait of Hormuz, pose major indirect risks to Indias infrastructure sector While the growth rate remained below averages from the previous year, the pickup still reflected some resilience to surging energy costs following the suspension of oil supply from the Middle East. They trigger surging construction costs from expensive crude and bitumen imports, project delays, and cyber threats to critical utilities, though domestic investment demand remains resilient.

Infrastructure investment has become central to Indias growth strategy in the context of global slowdown, high logistics costs and the need for productivity-led expansion. With the present emphasis on creating physical infrastructure, massive investment is planned in this sector. This requirement is of an immense magnitude. Better construction management is required for optimizing resources and maximizing productivity and efficiency. The outstanding performance under demanding situations in the past will stand in good stead and give confidence to the Indian construction industry to bring about an overall development in the infrastructure of the nation.

Indias infrastructure financing has undergone a major transformation over the past decade, shifting from reliance on budgetary support to a blended model of public and private capital. According to the World Bank, India has emerged as the largest recipient of Private Participation in Infrastructure (PPI) investment in South Asia, accounting for over 90% of the regions total. Institutions like the National Investment and Infrastructure Fund (NIIF) and the National Bank for Financing Infrastructure and Development (NaBFID) have emerged as pivotal anchors, mobilising global and domestic capital and providing long-term development finance to strengthen Indias infrastructure ecosystem. Alongside these institutions, instruments such as Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) have enabled monetisation of completed assets and recycling of funds into new projects.

The Union Budget 2026 27 gives a thrust to Indias infrastructure sector, positioning it as one of the seven strategic and frontier pillars underpinning long-term economic growth. Large-scale government spending builds investor confidence and encourages private participation in infrastructure projects.

Under the Union Budget 2026-27, the Centre has reaffirmed its strategic commitment to infrastructure development by raising public capital expenditure to 12.2 trillion (3.1% of GDP), up from 11.2 trillion in 2025-26 (BE). This enhanced outlay aims to bolster the overall infrastructure.

The US$ 1.3 trillion national master plan for infrastructure, Gati Shakti, which is a 100 lakh-crore project has been a forerunner to bring about systemic and effective reforms in the sector, and has already shown a significant headway. access to relevant data and maps from the PM Gati Shakti portal will be provided to private sector in project planning.

The Indian government has introduced various formats to attract private investments, especially in roads and highways, airports, industrial parks and higher education and skill development sectors. The Second Asset Monetization Plan aims to reinvest 10 lakh crore (US$ 115.34 billion) in capital for new projects over the period 2025-30 to recycle capital and attract private sector participation.

2025-26 is contemplated with a continuation of the 50-year interest free loan to states for capital expenditure and incentives for reforms, with a significantly enhanced outlay of 1.5 lakh crore (US$ 17.30 billion).

The revenue from operations during the year under review has improved to Rs.136.03 lakh as against Rs.128.81 lakh during the previous year. The net loss from operations after tax worked out to Rs.66.28 lakh as compared to net loss of Rs.86.43 lakh in the previous year.

SAB Mall- Sale of Remaining 4 shops held in stock-in-trade and Management Rights Transfer

The most significant operational development of FY2025-26 was the execution of an Agreement to Sell with M/s. SMC Enterprises Private Limited of New Delhi for the sale of remaining four shops (M-15-A, M-11, Basement, and Rooftop) held in stock-in-trade situated at SAB Mall, Noida for a consideration amount of 15 Crores out of which Rs.12.50 crore has since been received by the Company during the financial year and a Memorandum of Understanding in respect of the Transfer of common fixed assets, operation, maintenance, Management Rights, transfer of leasehold rights and all residual rights in its property i.e. SAB Mall, Noida with its sister concern, M/s Shubham Properties Private Limited for a total consideration amount of 2 Crores out of which 1.00 crore has been received by the Company during the year. The proceeds will be utilized for the payment of liabilities of the Company.

The Company is also in the process of execution of addendum agreement to sell and enter into MOU towards transfer of management rights upon clearance of Noida Authority dues and other related formalities. This transaction represents a deliberate strategic realignment- converting a capital-intensive, operationally complex mall management obligation into a structured, fee-backed disposition-consistent with the Boards asset-light transitional strategy. The Company is likely to complete these transactions during the financial year 2026-27.

Company is continuously striving to strengthen its operations in near future. Company is continuously striving to strengthen its operations in near future.

The Company has effective and robust system of internal controls to help management review the effectiveness of the financial and operating controls and assurance about adherence to companys laid down systems and procedures. Proper controls are in place, which are reviewed at regular intervals to ensure that transactions are properly authorized & correctly reported and assets are safeguarded. The Audit Committee periodically reviews the findings and recommendations of the Auditors and takes necessary corrective actions as deemed necessary.

The Company has a robust Enterprise Risk Management process in place, which is a holistic, integrated and structured approach to manage risks with the objective of maximizing shareholders value.

The risk management process broadly consists of identification, assessment, mitigation, prioritization and monitoring of risks. The ERM process allows the Company to:

Enhance confidence in achieving its desired goals and objectives

Effectively restrain threats to acceptable levels

Take informed decisions about exploiting opportunities

Owing to the nature of the industry the Company operates in, it is exposed to a variety of risk factors which are broadly categorized into technical, physical, construction, performance and legal risks.

A tight risk process is carried out from pre-bid to project completion stage to manage, mitigate and monitor these risks by adopting specific risk mitigation measures. During the year, the Board has reviewed the process and the Risks that have been identified for the business. Some of these key risks that the Company faces along with their mitigation strategies adopted are listed below:

The infrastructure sector has become the biggest focus area for the Government of India to fulfill its US$ 5 trillion economy dream The Government has suggested investment of 50,00,000 crore (US$ 750 billion) for railways infrastructure from 2018-30.

(References: Media Reports, Press releases)