Wagend Infra Venture Ltd Management Discussions

THE ECONOMIC SCENARIO:

GLOBAL SITUATION:

The global economy in FY 2024-25 navigated a complex and uneven recovery path amidst several ongoing challenges. While inflationary pressures eased in advanced economies, central banks across the world remained cautious, maintaining a tight monetary stance. The United States experienced resilient consumer spending and a stable labor market, allowing it to avert recession fears, though growth remained modest. In the Eurozone, growth remained subdued due to high energy prices and geopolitical uncertainties stemming from the prolonged Russia Ukraine conflict. Chinas post-pandemic recovery showed signs of fatigue, with sluggish domestic demand, real estate sector stress, and export headwinds weighing on growth momentum.

According to the International Monetary Fund (IMF), global GDP growth is estimated at 2.8% in FY2025 as compared to its projection of 3.2% for FY2024. Key downside risks include ongoing geopolitical tensions, volatility in commodity markets, and tighter global financial conditions. These factors have implications for capital flows, investment activity, and trade patterns across emerging markets, including India. From an infrastructure perspective, global investors continued to demonstrate keen interest in long-term sustainable assets such as affordable housing, renewable energy, and climate-resilient infrastructure. However, project financing remained constrained due to higher interest rates and cautious lending by global financial institutions.

India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships. India is expected to become the third-largest economy in the world with a GDP of $5 trillion in the next three years and touch $7 trillion by 2030 on the back of continued reforms. Ten years ago, India was the 10th largest economy in the world, with a GDP of $1.9 trillion at current market prices. Today, it is the 5th largest with a GDP of $3.7 trillion. The government has, however, set a higher goal of becoming a developed country by 2047

Indias economy remained a bright spot in the global landscape, demonstrating resilience and strong fundamentals despite external headwinds. As per estimates from the Reserve Bank of India (RBI) and the Ministry of Finance, Indias GDP is expected to grow by 7.0-7.2% in coming years, supported by robust domestic demand, higher capital expenditure by the government, and a rebound in private investment.

Key drivers of this growth included:

• Strong infrastructure push under the PM Gati Shakti and National Infrastructure Pipeline (NIP), enhancing connectivity and logistics.

• Increased budgetary allocation towards affordable housing under the Pradhan Mantri Awas Yojana (PMAY - Urban and Rural), which continued to support housing demand in Tier 2 and Tier 3 cities.

• Improved financial inclusion and rising formalization of the economy, providing momentum to consumer spending.

• Digital infrastructure and urban development, promoting smart cities and planned real estate growth.

The Indian real estate and infrastructure sectors benefited from policy continuity, improved ease of doing business, and investor-friendly reforms. The governments commitment to achieving "Housing for All" and increasing urban homeownership through subsidies, interest subvention, and regulatory support has helped drive momentum in the affordable housing segment. Furthermore, the availability of low-cost construction technologies and enhanced participation of private players under the PPP (Public-Private Partnership) model boosted project execution.

Inflation, which was a concern in the early part of the year due to food and fuel prices, was brought under control through timely policy interventions. The RBI maintained a calibrated monetary policy, ensuring that interest rates remained conducive for long-term investments without stoking inflationary fears. India is primarily a domestic demand-driven economy, with consumption and investments contributing to 70% of the economic activity. With an improvement in the economic scenario and the Indian economy recovering from the Covid-19 pandemic shock, several investments and developments have been made across various sectors of the economy.

• Indias foreign exchange reserves reached $668.33 billion in FY2025 from $642.49. This rise reflects the countrys strengthened economic stability and global financial standing.

• In 2024, Indias PE-VC market rebounded, growing by 9% to $43 billion across approximately 1,600 deals. This resurgence was driven by increased venture capital and growth investments, positioning India as a key destination for PE-VC in the Asia-Pacific region.

• Indias merchandise exports for FY2025 total $437.42 billion, a slight increase from the previous fiscal year FY2024 which was $437.07.

• India improved its position in the Global Innovation Index 2024, moving up one spot to 39th globally. The country continues to lead within the Central and Southern Asia region and ranks 22nd globally in Knowledge and Technology Outputs.

• In March 2025, Indias GST revenue reached ^1.96 lakh crore, marking a 9.9% increase compared to March 2024. This figure represents the second-highest monthly collection since the implementation of GST.

• India achieved a significant milestone by reaching $1 trillion in cumulative FDI inflows since April 2000. This underscores the countrys attractiveness as a global investment destination.

• The IIP growth rate for February 2025 stood at 2.9%, a decrease from 5.0% in January 2025. The manufacturing sector contributed significantly to this growth, while mining and electricity sectors showed moderate performance.

• Indias CPI-based retail inflation for December 2024 was 5.22%, with rural and urban inflation rates at 5.76% and 4.58%, respectively. This indicates a moderate inflationary environment, aligning with the Reserve Bank of Indias target range.

• During FY2025 net FII/FPI inflow in India was $3,891 Million which was $25,390 during FY2024.

Over the years, the Indian government has introduced many initiatives to strengthen the nations economy. The Indian government has been effective in developing policies and programmes that are not only beneficial for citizens to improve their financial stability but also for the overall growth of the economy. Over recent decades, Indias rapid economic growth has led to a substantial increase in its demand for exports. Besides this, a number of the governments flagship programmes, including Make in India, Start-up India, Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, is aimed at creating immense opportunities in India. In this regard, some of the initiatives taken by the government to improve the economic condition of the country are Pradhan Mantri Suryodaya Yojana, PM-VISHWAKARMA, Amrit Bharat Station Scheme, Atma Nirbhar Bharat and Local goes Global, Production Linked Incentive Scheme, Pradhan Mantri Garib Kalyan Ann Yojana, Antodaya Ann Yojna, Amrit Bharat Station scheme, Credit Guarantee Scheme for Start-ups, Telecom Technology Development Fund and many more incentive schemes and projects in diverse sectors like Agriculture and Allied industries, IT and Electronics, MSME, Manufacturing, Renewable Energy, Pharma, Tourism, Defence & Aerospace, and Handloom & Textiles. Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. The Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aim to take it to 25% of the GDP from the current 17%. Besides, the government has also come up with the Digital India initiative, which focuses on three core components: the creation of digital infrastructure, delivering services digitally, and increasing digital literacy

Indias FDI inflows have increased more than 20 times from 2000-01 to 2024-25. According to the Department for Promotion of Industry and Internal Trade (DPIIT), Indias cumulative FDI inflow stood at US$ 1,033.40 billion between April 2000-September 2024, mainly due to the governments efforts to improve the ease of doing business and liberalization of FDI norms. The total FDI inflow into India from April 2024 to December 2024 stood at US$ 40.67 billion, and FDI equity inflow for the same period stood at US$ 28.35 billion. From April 2000 to September 2024, Indias service sector attracted the highest FDI equity inflow of 16.3%, followed by the computer software and hardware industry at 15.1%, trading at 6.5%, telecommunications at 5.6%, and automobile industry at 5.3%.

Nominal GDP or GDP at Current Prices in the year 2024-25 is estimated at ^324.11 lakh crore (US$ 3.89 trillion), against the Provisional Estimates of GDP for the year 2023-24 of ^295.36 lakh crore (US$ 3.54 trillion). The growth in nominal GDP during 2024-25 is estimated at 9.7% as compared to 10.5% in 2023-24. Real GDP or GDP at Constant (2011-12) Prices in the year 2024-25 is estimated at ^184.88 lakh crore (US$ 2.22 trillion), against the Provisional Estimates of GDP for the year 2023-24 of ^173.82 lakh crore (US$ 2.09 trillion). The growth in real GDP during 2024-25 is estimated at 6.4% as compared to 8.2% in 2023-24.

Inflationary pressures have further eased in early 2025. As of April 2025, the Consumer Price Index (CPI) inflation stood at 4.8%, down from 5.1% in January 2024 and 6.5% in the same period the previous year. This rate remains comfortably within the Reserve Bank of Indias target range of 2% to 6%, reflecting relative price stability amid evolving economic conditions.

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure timebound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for Indias economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects.

Infrastructure is the backbone of industrial and agricultural output, as well as international and domestic commerce. It is the fundamental organisational and physical structure required to run a successful firm. Communication and transportation, sewage, water, education, health, safe drinking water, and monetary systems are all examples of basic infrastructure in an organisation or for a country. The infrastructure of a country has a direct impact on its economic and social growth. Because of the massive expansion of economic and social infrastructures, many developed countries have made significant developments. A good infrastructure facilitates the work process, resulting in increased productivity. Infrastructure is a key enabler in helping India become a USD $26 trillion economy. Investments in building and upgrading physical infrastructure, especially in synergy with the ease of doing business initiatives, remain pivotal to increase efficiency and costs. The Government also recently reiterated that infrastructure is a crucial pillar to ensure good governance across sectors.

The governments focus on building infrastructure of the future has been evident given the slew of initiatives launched recently. The US$ 1.3 trillion national master plan for infrastructure, Gati Shakti, has been a forerunner to bring about systemic and effective reforms in the sector, and has already shown a significant headway. Infrastructure support to the nations manufacturers also remains one of the top agendas as it will significantly transform goods and exports movement making freight delivery effective and economical. The "Smart Cities Mission" and "Housing for All" programmes have benefited from these initiatives. Saudi Arabia seeks to spend up to US$ 100 billion in India in energy, petrochemicals, refinery, infrastructure, agriculture, minerals, and mining. The infrastructure sector is a key driver of the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from the Government for initiating policies that would ensure the time-bound creation of world- class infrastructure in the country. The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for Indias economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects.

India to reach a US$ 5.7 trillion economy by 2028, infrastructure development is the need of the hour. The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as Make in India and the production-linked incentives (PLI) scheme to augment the growth of the infrastructure sector. Historically, more than 80% of the countrys infrastructure spending has gone toward funding for transportation, electricity, and water, and irrigation. While these sectors still remain the key focus, the government has also started to focus on other sectors as Indias environment and demographics are evolving. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing provision to water and sanitation services to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectoral competitiveness. The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as Make in India and the production-linked incentives (PLI) scheme to augment the growth of infrastructure sector. Historically, more than 80% of the countrys infrastructure spending has gone toward funding for transportation, electricity, and water& irrigation. While these sectors still remain the key focus, the government has also started to focus on other sectors as Indias environment and demographics are evolving. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing provision to water and sanitation services to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectoral competitiveness. In the Union Budget 2024-25, the capital investment outlay for infrastructure has been further increased by 15% to ^11.5 lakh crore (US$ 140 billion), accounting for approximately 3.4% of GDP. The capital outlay for Railways in 2024-25 has been set at ^2.75 lakh crore (US$ 33 billion), marking the highest-ever allocation and reflecting continued strong focus on rail infrastructure development. The National Infrastructure Pipeline (NIP) project count has expanded to 9,500 projects spanning 35 sub-sectors, according to recent reports. Of these, 2,750 projects are currently under development, with an estimated total investment of around US$ 2.1 trillion. Nearly half of these projects are in the transportation sector, with approximately 4,100 projects in roads and bridges alone. The Indian Railways anticipates achieving a total revenue of ^2,90,000 crore (US$ 35 billion) by the end of 2024- 25. Indias logistics market, estimated at US$ 460 billion in 2024, is projected to grow at a CAGR of 8.4%, reaching around US$ 680 billion by 2029. The government aims to improve Indias ranking in the Logistics Performance Index to 24 and reduce logistics costs from 14% to 8% of GDP over the next five years, potentially cutting costs by approximately 40%. Under the NIP framework, Indias infrastructure investment budget stands at US$ 1.5 trillion, with allocations distributed as follows: 25% for renewable energy, 19% for roads and highways, 17% for urban infrastructure, and 13% for railways, highlighting the governments commitment to sustainable and balanced infrastructure growth.

The Infrastructure Industry in India have been experiencing a moderate growth in its different verticals with the slow development activities leading to fall in interest by foreign as well as domestic infrastructure players in this field.

The Company continuously focusing to explore and develop opportunities in the infrastructure sector and due to slow growth rate in the infrastructure development the Company is doing investing activities and the management of the Company is building up the team to improve its investment decisions and increase the value of the stakeholders.

The Financial Year 2024-25 remained a mixed bag of opportunities and challenges. On one hand, domestic activity exhibited resilience on the back of strong domestic demand, whilst on the other, global geopolitical uncertainty continued to impact inflation, interest rates, and the supply chain.

The global economy has been in better shape than anticipated at the start of the year, having demonstrated some signs of growth, as reflected in the various high-frequency indicators.

Climate change increases the impact and likelihood of some physical risks, which could lead to execution disruption and losses. These risks manifest both as acute physical risks, e.g., extreme weather conditions, heavy precipitation, etc., as well as chronic physical risks, e.g., higher ambient temperatures, increase in sea levels, etc. While business operations typically face a higher impact of such risks, now even assets and the built environment are increasingly facing such threats.

The total income of the Company for the financial year 2024-25 was Rs. 42.98 lakhs as against total income of Rs.170.80 and net profit of Rs 2.29 lakhs against net loss of Rs. (0.56) lakhs in corresponding previous year.

The timely availability of skilled and technical personnel is one of the key challenges. The Company maintains healthy and motivating work environment through various measures. This will help the Company to retain and recruit skilled work force resulting in the timely completion of the work.

The Company has adequate internal control procedure commensurate with its size and nature of the business. The internal control system is supplemented by extensive internal audits, regular reviews by management and well-documented policies and guidelines to ensure reliability of financial and all other records to prepare financial statements.

Human Resources are important asset of any business. Skilled and technical staff is required by us for our projects. We take up various projects based on availability of right mix of man power. Thus our growth is likely to be affected by our ability to attract and retain skill and technical manpower.

There are no significant changes in the Key Financial Ratios during the period under review.

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities, laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in Government regulations, tax laws and other factors such as litigation and industrial relations.