PNC Infratech Ltd

Our nation's growth trajectory as one of the fastest-growing economies globally has been significantly bolstered by sustained focus on infrastructure development.

Dear Stakeholders,

I am honored to present Annual Report for FY 2023-24. It was a year marked by transformative achievements as well as certain momentous challenges. As I reflect on the past year, despite the challenges, our Company performed well in terms of both progress and profitability. We also succeeded in strengthening our core sectors and expanding into new areas. This report stands as a testament to our collective efforts and reaffirms our commitment to creating value for all stakeholders.

Industry Overview and Government Support

Our nation's growth trajectory as one of the fastest-growing economies globally has been significantly bolstered by sustained focus on infrastructure development. The Government is resolutely committed to enhance our nation's infrastructure by creating an enabling environment and framework for opening extensive opportunities across various sectors.

The Ministry of Road Transport and Highways (MoRTH), in collaboration with NHAI and NHIDCL, achieved impressive milestones by constructing 12,349 kilometers of national highways during FY 2023-24. NHAI exceeded its targets, completing 6,644 kilometers of highways compared to 5,544 kilometers in the previous fiscal year. Furthermore, MoRTH has ambitious plans to add an additional 6,000 kilometers of high-speed highways to the national network, aiming to improve connectivity and streamline transportation, which is expected to create new business opportunities for the road developers, like us.

On awarding front, there has been a sharp decline in new projects awarding process during FY 2023-24. The acute slowdown in launching of new projects for award largely attributed to pausing award of new projects under the Bharatmala Pariyojna owing to increased land costs and budget overruns. Several projects envisaged under the Bharatmala Pariyojna have been put on hold for the time being by the Government. Another critical challenge being faced in commencement of physical execution of already awarded projects is persistent delay in acquisition and procession of land, particularly in certain states in the country.

Looking ahead to FY 2024-25, road construction activity is expected to be subdued across the industry primarily due to a slowdown in the awarding of projects in FY 2023-24, which might impact Company's performance also during FY 2024-25. Nonetheless, India aims to become a developed nation by 2047, with infrastructure growth as a key focus. The FY 2024-25 budget allocation of 3.4% of GDP to the transportation and logistics sector presents significant opportunities for PNC Infratech.

Major initiatives include expanding national highways to 200,000 km aggregate length, high-speed road corridors, and new railway projects, alongside a substantial allocation for water projects under the Jal Jeevan Mission offer PNC Infratech substantial growth prospects going forward.

Financial Highlights

Despite facing challenges like prolonged monsoon season that hindered construction progress significantly across the geographies, our Company has demonstrated remarkable resilience by achieving a decent progress and growth in revenues during FY 2023-24.

On a standalone basis, our revenue for FY 2023-24 was ' 7,699 Cr, up 9% from FY 2022-23. Standalone EBITDA increased by 34% to ' 1,277 Cr with a margin of 16.6%, and profit rose by 39% to ' 850 Cr, with a PAT margin of 11.0%.

Our consolidated revenue for FY 2023-24 reached ' 8,650 Cr, a 9% increase from FY 2022-23. Consolidated EBITDA grew by 25% to ' 2,005 Cr, with a margin of 23.2%. Consolidated profit rose by 38% to ' 909 Cr, with a PAT margin of 10.5%.

I feel happy to share that while there has been a decent revenue growth in FY 2023-24 on both standalone and consolidated basis, EBIDTA and PAT of FY 2023-24 grew significantly during FY 2023-24.

The results demonstrate our commitment to deliver consistent value to our stakeholders.

Key Achievements

This year, our Company achieved sizeable number of notable milestones and achievements on both project execution and project financing fronts that include:

l Our HAM portfolio now includes 23 projects with aggregating total project cost of ' 30,199 Cr, reflecting our strong presence in the key implementation mode of execution of highway projects

, Our subsidiary, PNC Triveni Sangam Highways Private Limited, received Provisional Completion Certificate for the 6-laning of the Chakeri to Allahabad section of NH 19 HAM project on March 01, 2024

. On March 08, 2024, we received 'Completion Certificate' from NHAI for the Lucknow Ring Road EPC Project valued at ' 1,069 Cr, effective from February 29, 2024

, We executed a Concession Agreement with MPRDC for the Western Bhopal Bypass HAM Project on March 07, 2024

l On February 26, 2024, the Madhya Pradesh Public Works Department awarded us an EPC Contract for constructing an elevated corridor in Gwalior, valued at ' 699 Cr

Executed settlement agreement with NHAI under the 'Vivad Se Vishwas II' Scheme of Government of India in the arbitration matter of Dholpur- Morena project by our Company for a settlement amount of ' 255.4 Cr and received the amount from NHAI in FY 2023-24

, In another arbitration matter, our Company received ' 42.21 Cr from Haryana State Roads &

Bridges Development Corporation Limited (HSRDC) through hon'ble Court of Additional District Judge, Commercial Court, Chandigarh toward arbitration award published in our favor in four laning of Gurgaon-Nuh-Rajasthan Border project, in FY 2023-24

n We made significant progress in Rural Drinking Water Projects under the Jal Jeevan Mission (JJM), booking ' 1,906 Cr in revenue in the drinking water segment during FY 2023-24

n Our Company achieved financial closures for the three Varanasi- Kolkata greenfield highway HAM project packages, in FY 202324 well within the stipulated timelines

Order Book

Our order book under execution stands at Rs. 15,400 Cr as of March

31, 2024, not including the aggregate contract value of two recently secured EPC contracts totaling ' 4,994 Cr. Including these, our order book currently ' 20,400 Cr, which is 2.7 times our FY 2023-24 standalone revenue. This robust order book provides our Company with a visibility for future growth over the next two years. Highway and expressway contracts account for around 70% of this order book, while water and canal projects contribute approximately 30%.

Credit Rating

Our strong balance sheet and financial prudence have led to continuous credit rating upgrades, enabling us to secure debt at competitive rates. Our standalone total assets were Rs. 7,247 Cr. On a consolidated basis, total assets rose toRs. 15,610 Cr in March 2024, contributing to an increase in consolidated net worth to Rs. 5,185 Cr. Our credit facilities were reaffirmed

as CARE AA+ (Double A Plus) with a Stable Outlook. This reflects our strong financial health and our ability to manage resources effectively.

A Promise to the Future

As we move forward, our commitment to our stakeholders remains steadfast. We continue to invest in our team's growth and foster a culture of excellence and collaboration. Upholding high ethical standards and promoting a supportive work environment are core to achieving our objectives. Our focus on innovation, efficiency, and sustainability will guide us as we strive to reach new milestones and create lasting value.

Closing Note

In closing, I extend my heartfelt gratitude to our team, shareholders, and all stakeholders for their unwavering support throughout FY 2023-24. Your dedication and belief in our vision have been invaluable. I offer my sincere thanks to the Board for their insightful guidance, our employees for their tireless efforts, and our business partners for their trust and confidence. Your support continues to drive us as we strive to reach new milestones and expand our horizons.