Dear Shareholders,
India's economic outlook appears positive and is poised for growth,
driven by initiatives to enhance infrastructure and business conditions. Major
institutions are revising their growth forecasts upwards. This optimism stems from strong
performance in 2024 and a robust domestic market. Government spending and a resurgent
manufacturing sector are key drivers. Investment in connectivity and favorable monetary
policies are expected to attract more investors and boost economic expansion. Despite
challenges like inflation and geopolitical factors, India's strong fundamentals, including
a robust private sector, are likely to support growth. Overall, the Indian economy shows
promise for continued upward momentum.
Economic Overview
India's economy has displayed remarkable resilience and sustained
robust growth, propelled by a combination of strategic initiatives undertaken by the
government and favorable economic conditions with real GDP expanding by 8.2%.
A key factor fueling this growth has been the government's increased
focus on infrastructure development, with an allocation of Rs. 11.1 Lakhs Crore (3.4% of
GDP) for capital expenditure in the fiscal year 2024-25. Additionally, initiatives such as
the Production Linked Incentive (PLI) scheme, aimed at boosting key targeted manufacturing
industries, have contributed to the growth of the manufacturing sector. India has also
witnessed a steady inflow of Foreign Direct Investment (FDI), attracted by favorable
policies and the country's vast consumer market, bolstering economic growth.
Industry Overview
India's infrastructure sector is poised for strong growth, with planned
investments amounting to US$1.4 trillion by 2025. The government's ambitious National
Infrastructure Pipeline program outlines the injection of massive capital into various
sub-sectors, including energy, roads, railways, and urban development. This unprecedented
push is expected to spawn associated industries, create jobs, and stimulate the economy.
Specific focus areas are the expansion of public digital infrastructure, clean and
renewable energy projects, and establishing resilient urban infrastructure. This ambitious
undertaking seeks to enhance India's global competitiveness and improve the quality of
life across its vast populace. The Indian government's proposed capital expenditure has a
heavy emphasis on the renewable energy and road sectors. This trend is reflected in the
bulk of transactions and investment activity happening currently but highlights the
importance of having a diversified focus across sectors.
The Bharatmala Pariyojana is progressing with Phase I focusing on
developing 34,800 km of National Highways. It emphasizes corridor-based development and is
set to conclude by 2027-2028, covering 31 States/UTs and over 550 districts. Additionally,
the government targets building 22 new greenfield expressways, signaling significant
advancements in India's transportation infrastructure.
Private sector participation is vital for financing key infrastructure
projects in India, given the government's fiscal constraints and the need for prudent
spending. Involving the private sector promotes industry competitiveness, enabling access
to a wider talent pool and enhanced resource utilization. There are several PPP projects
currently in pipeline across sectors. Ultimately, the collaboration between the government
and the private sector is essential for creating resilient, future-ready infrastructure
that paves the way for a prosperous and sustainable future for all citizens of India.
Financial Perspective and Outlook
Your company, on account of robust order inflows, better project
execution, subdued by inflationary challenges, could still deliver on its financial
performance.
Total revenue increased from Rs.6,478 Crore in Fiscal 2023 to Rs.7,841
Crore in Fiscal 2024, reflecting a 21% increase. Profit before exceptional items and tax
amounted to Rs.358 Crore.
The focus remains on sustaining a robust EPC business in highways,
railways, power transmission, and buildings. The total order book of the Company at the
end of Fiscal 2024 stands at Rs.11,697 Crore. Of this total, the Roads HAM and Roads EPC
segments contribute Rs.911 Crore and Rs.4,426 Crore, respectively; Power T&D and other
projects contribute Rs.4,796 Crore; Railways account for Rs.877 Crore; and Buildings EPC
contributes Rs.687 Crore.Your Company anticipates good order inflow for FY25. With this
order book, your Company would be positioned to ensure sustainable growth in its current
business portfolio through profitable expansion and execution.
Conclusion
I extend my deepest gratitude to our esteemed shareholders for the
unwavering trust you have consistently placed in us. Your steadfast support is an
invaluable pillar of strength, guiding us through these unprecedented times with
resilience and confidence.
Our Company remains steadfastly committed to its core values of
transparency, accountability, responsibility, compliance, ethics, and trust. These
principles will continue to be the foundation of all our endeavors. I would like to
express my heartfelt appreciation to all our stakeholders, including our dedicated
shareholders, private equity partners, banks and financial institutions, the Ministry of
Surface Road Transport and Highways, the National Highways Authority of India, various
State Road Development Corporations and Boards, State Power Generation and Distribution
Authorities, our loyal customers, dependable vendors, and the entire Team Ashoka.
Together, we will forge ahead, embracing a future filled with promise
and prosperity.