Marathon Nextgen Realty Ltd Management Discussions

Global Economy

According to the International Monetary Fund (IMF), the global economy entered CY 2026 carrying momentum from CY 2025, only to face renewed disruption from the conflict in the Middle East. The IMFs April 2026 World Economic Outlook projects global growth at 3.1% in CY 2026 and 3.2% in CY 2027, moderating from an estimated 3.4% in CY 2025, reflecting continued resilience amid an evolving geopolitical and economic landscape. Advanced economies are holding broadly steady on the back of steady consumer demand and firm labour markets. Emerging markets are drawing on policy buffers to manage sharper pressures from energy price volatility, tighter financial conditions and disrupted trade flows.

The conflict adds to energy-price uncertainty, though global supply networks have so far absorbed it without the widespread disruption seen between CY 2021 and CY 2023.

The IMF expects global headline inflation to rise modestly in CY 2026 before resuming its decline in CY 2027. That allows central banks to stay measured and data-led, particularly in emerging economies, where policy has worked to keep expectations anchored.

Set against this are several supports. Tariff de-escalation between the US and China, better-than-expected activity in several major economies in late 2025 and continued structural reform in key emerging markets are all holding growth up. The shift towards longer fixed-rate mortgages during the pre-pandemic decade of low interest rates moderated the near-term effect of policy rate increases on housing markets. For the real estate sector, this global backdrop carries two main implications. The first is the higher-for-longer interest rate environment in advanced economies, which shapes global capital flows. The second is the rising cost of imported construction materials.

Indian Economy

India navigated FY 2025-26 with sustained momentum, supported by strong domestic demand in an otherwise uncertain global environment. Real GDP grew at an estimated 7.7%, with private consumption leading the expansion, complemented by continued strength in construction and a visible uptick in manufacturing activity. India maintained robust economic growth during the year, with nominal GDP exceeding USD 4 trillion and per capita income continuing to improve. Unlike many economies reliant on external demand or policy stimulus, Indias growth remained firmly anchored in domestic consumption, supported by ongoing formalisation and structural reforms.

Macroeconomic conditions remained supportive, with CPI within the RBIs tolerance band. The RBI reduced the repo rate by 125 bps to 5.25% by December 2025, supporting lower borrowing costs. Home loan rates moderated to 7.10-7.65%, improving affordability, while lower financing costs supported developers. However, global energy-price volatility remains a key risk to the FY 2026-27 inflation outlook.

Fiscal policy remained growth-oriented, with Union Budget FY 2026-27 raising capital expenditure to Rs. 12.2 Lakh crores. Infrastructure investments, high-speed rail, City Economic Regions and data-centre incentives are expected to support long-term real estate demand, particularly across infrastructure-linked markets.

Looking ahead, India is projected to remain the fastest- growing major economy, with real GDP growth for FY 2026-27 projected at 6.6% in the RBIs June 2026 Monetary Policy Statement. Growth is expected to remain supported by strong domestic demand, demographic tailwinds, and continued formalisation, although the RBI noted that elevated global energy prices and supply chain uncertainties could pose headwinds.

Indian Real Estate Industry Overview

The sector is estimated at over USD 550 billion in FY 2025-26 and is projected to reach over USD 900 billion by FY 2030-31, representing a 10% CAGR. This expansion will be driven by urbanisation, infrastructure development, and demographic tailwinds, enabling the sectors GDP contribution to grow from approximately 7% to 15% by FY 2030-31.

The residential segment, accounting for over 70% of the market, continues to be driven by end-user demand. Average selling prices rose mid-single digit YoY in FY 2025-26, reflecting sustained demand for premium and mid-income housing. Inventory remained healthy, with Tier 1 cities reporting 1.4-1.6 years-to-sell. New launches are expected to recover in FY 2026-27 as approvals improve. Developer consolidation remains a key structural trend, with organised, well-capitalised players gaining market share through stronger balance sheets, land acquisitions and expanded development pipelines. This trend is particularly evident in redevelopment-led markets, where complex approvals, rehabilitation requirements and stakeholder management favour developers with strong execution capabilities and financial resources.

Indias residential market demonstrated underlying strength despite modest volume headwinds. While unit sales declined 1% to 7.10 Lakh units, annual sales value surged 16% to Rs. 9.33 Lakh crores, reflecting strong pricing power and buyer appetite for quality housing.

This value-led growth signals market maturation toward premium and mid-income segments, where buyers prioritise quality, location, and amenities. The MMR led growth with an 18% value increase, validating the enduring appeal of established micro-markets with strong infrastructure connectivity and regulatory certainty.

New residential launches reached 6.2 Lakh units, growing nearly 10% year-on-year, with Q4 FY 2025-26 recording an all-time high of 1.72 Lakh units. Big developers, comprising Mega Large and Super Large entities and representing a mid-single-digit percentage of the active developer base, commanded 44% of supply, reflecting their superior access to capital and execution capabilities. Large and medium developers contributed 27% of launches through a broader base of firms, indicating healthy mid-tier consolidation and regional presence. Small developers, comprising over two-thirds of the developer universe, delivered around 29% of supply, signalling persistent fragmentation at the grassroots level. This distribution underscores the sectors maturation, with institutional players possessing stronger financial capabilities and execution capacity increasingly capturing a larger share of supply, while smaller operators remain relatively constrained by capital availability and regulatory complexity.

Market growth is broadening geographically beyond traditional metros. While Tier 1 cities contributed 83.7% of national sales value, secondary markets showed encouraging momentum in FY 2025-26. Pan-India housing prices appreciated 3% year-on-year, with 61% of properties recording 0-10% growth, reflecting normalised appreciation cycles and improved affordability. This balanced price growth, combined with geographic diversification, reduces concentration risk and supports sustainable, long-term market expansion across Indias urbanisation trajectory.

Commercial Real Estate Segment

The commercial real estate segment has entered a phase of sustained expansion, with leasing activity consistently outpacing new completions since 2024, resulting in a steady decline in vacancy levels. Global capability centres (GCCs) remain the primary demand driver, accounting for over one third of net office absorption, supplemented by demand from data centres and technology- enabled occupiers. Supply remains concentrated among organised developers, leading to improved asset quality and pricing power for Grade A assets.

Indias Grade A office market surpassed 1.10 billion sq. ft. of cumulative stock in H1 CYRs. 26, supported by 42.6 MSF of demand and fresh supply of 27.7 MSF.

IT/ITeS, co-working and maturing GCCs remained key demand drivers. MMR stood out with a 2.6x demand-to- supply ratio and 11.7% vacancy, reinforcing its position as a leading financial and corporate hub. Pan-India vacancy moderated to 15.2%, while Bengaluru and Pune recorded healthy absorption. Sustained GCC expansion, outsourcing space risk to flex operators, and hedging long-term commitments are expected to support office absorption over the medium term.

Mumbai Metropolitan Region

Within this broader landscape, MMR remains the largest real estate market in India. The region demonstrated robust residential market fundamentals in FY 2025-26, accounting for over one-quarter of pan-India annual sales value. Unit sales grew mid-single digit year-on- year, validating the enduring appeal of established micro-markets with superior infrastructure connectivity and regulatory maturity. MMRs strong value growth reflected sustained buyer demand across premium and mid-income segments, with sales value recording mid-to-high teen year-on-year growth. Market normalisation was reflected in moderated new launches, while unsold inventory levels remained healthy. This balanced market dynamic underscores MMRs position as a preferred investment and end-user destination, underpinned by steady absorption and availability of quality housing stock across diverse price points.

Furthermore, MMRs Grade A office market emerged as Indias standout commercial performer in CY 2025, recording the strongest demand-to-supply ratio across major metros. Robust leasing demand driven by strong BFSI participation and diversified occupier expansion underscored the regions appeal as a premier financial hub. Vacancy compression reflected sustained occupier confidence in prime micro-markets and quality assets. The regions concentration of institutional capital and corporate activity ensured

resilient rental trajectories. With significant supply under construction through CY 2031, MMRs office market remains strategically positioned to support continued absorption momentum and reinforce its status as Indias preferred destination for global occupiers and investors.

The most dynamic growth corridors are the citys periphery: Navi Mumbai (including Panvel), Thane,

Dombivli, and Bhandup, each benefiting from infrastructure investments that are materially shortening commute times and closing the price gap with the citys core.

Four infrastructure milestones defined the year for MMR.

71 The Navi Mumbai International Airport commenced commercial operations in December 2025 and transitioned to 24/7 operations, a transformative connectivity event for Panvel and the wider airport belt

71 The Atal Setu (Mumbai Trans Harbour Link), now fully operational, has reduced Navi Mumbai- to-South Mumbai travel to under an hour

7i The Goregaon-Mulund Link Road (GMLR) project is advancing, promising to unlock Bhandups full connectivity potential by linking LBS Marg to the Eastern and Western Express Highways

71 The Airoli-Katai Naka Freeway project (Phases 1 and 2 now operational) has revolutionised Dombivlis connectivity, slashing road travel time to the IT and corporate hubs of Navi Mumbai and Thane to just 20 minutes

Each of these projects directly benefits Marathons land bank.

While the central and island city zones maintain their ultra-luxury market positions with steep capital values, the most significant market traction is being witnessed in peripheral and extended suburbs. Hotspots such as Thane, Navi Mumbai (including Panvel and Kharghar), Goregaon, and the wider Western Suburbs are offering an optimal balance of affordability, expanding infrastructure scale, and excellent connectivity, making them the preferred choices for modern homebuyers.

[Sources: ICRA Residential Real Estate Reportl Liases Foras Residential Market l CRE Matrix India Office Report l Mordor Intelligence]

Company Overview

FY 2025-26: A Year of Strategic Transformation

FY 2025-26 was a year of deliberate and decisive action for us at Marathon Nextgen Realty Limited (‘Marathon, ‘MNRL, ‘The Company or ‘We). During the year, we executed on three concurrent fronts: a transformational capital raise that restructured our balance sheet, a series of disciplined acquisitions that expanded our development pipeline, and meaningful regulatory progress on the proposed amalgamation that will substantially enhance our scale. Collectively, these initiatives have repositioned us for a larger and more sustainable growth trajectory while preserving the operational discipline that has historically defined our approach to capital allocation and execution.

Our operational performance remained resilient throughout the year. Pre-sales stood at Rs. 576 crores, while collections reached Rs. 781 crores. We delivered our highest- ever Profit After Tax (PAT) of Rs. 206 crores, with a PAT margin of approximately 32%. Achieving these results

alongside a Rs. 900 crores capital raise and a significant balance sheet transformation reflects the strength of our operating platform and the disciplined execution of our strategy.

Capital Structure Transformation

The completion of our Rs. 900 crores QIP during FY 2025-26 was one of the most significant milestones in Marathons recent history. We structured the transaction with a clear capital allocation framework, ensuring that the proceeds were deployed towards strengthening our balance sheet, accelerating project execution, and enhancing our future growth pipeline.

We utilised Rs. 340 crores towards the repayment of outstanding debt, enabling us to transition to a net debt-free position as of 31 March 2026. This marks an important inflection point in our journey. A net cash balance sheet enhances financial resilience, improves earnings quality by reducing interest costs, and provides us with greater flexibility to pursue growth opportunities without the constraints typically associated with leverage. We allocated Rs. 160 crores towards accelerating construction across our ongoing projects. This investment is expected to support faster project execution, improve delivery timelines, facilitate revenue recognition, and strengthen cash flow generation through quicker conversion of completed inventory into collections.

An amount of Rs. 300 crores was earmarked for future project acquisitions, with a portion already deployed towards acquisitions in Kanjurmarg as of 31 March 2026.

Approximately Rs. 250 crores remained available for deployment as of 31 March 2026. This provides us with substantial financial flexibility to pursue attractive development opportunities across the MMR and expand our portfolio in a disciplined and value-accretive manner.

The successful participation of reputed institutional investors in the QIP reflects confidence in our business fundamentals, governance standards, and long-term growth strategy. Their support validates the strategic direction we have adopted and reinforces our belief that Marathon is well positioned to create sustainable long-term value for all stakeholders in the years ahead.

Portfolio Expansion: Kanjurmarg Acquisitions and the PTC Model

Our acquisition activity during FY 2025-26 reflected a disciplined approach to capital allocation and a clear focus on expanding our development pipeline through capital- efficient opportunities. During the year, we acquired 51% controlling stakes in DVK Developers Private Limited (DVK), Shree S S Developers Private Limited (SSSD), and Shree Swami Samarth Builders (SSSB), adding approximately 5.94 Lakh sq. ft. of carpet area across six residential projects in Kanjurmarg, with an estimated Gross Development Value (GDV) of over Rs. 840 crores. While our economic interest in these entities is 34%, the controlling stake provides us with oversight of project execution, construction quality, timelines, and delivery standards. With an aggregate investment of approximately Rs. 70 crores, these acquisitions were completed at an attractive entry valuation.

The strategic rationale for these acquisitions is threefold. First, the portfolio offers near-term development visibility, with a portion already under construction and several projects expected to commence within the next 12 months. Second, Kanjurmarg is an established micro-market supported by strong connectivity, improving infrastructure, and healthy demand fundamentals. Third, a significant portion of the portfolio is expected to be developed under the Permanent Transit Camp (PTC) model.

The PTC model creates a differentiated business-to- business (B2B) revenue stream, whereby transit accommodation units are sold to developers undertaking redevelopment projects. This model benefits from demand driven by regulatory requirements, comparatively earlier collections, and lower dependence on broader residential market cycles, thereby enhancing revenue visibility and cash flow predictability.

We also acquired a 90% stake in Sunset Spaces Private Limited during the year, further strengthening our development pipeline and long-term land inventory within the MMR. More recently, Sunset Spaces entered into Development Agreements for two redevelopment projects

in Versova and Sewri, with a combined estimated GDV of over Rs. 900 crores. The Versova project marks our entry into society redevelopment, while the Sewri project broadens our capabilities into cluster redevelopment. These projects further strengthen our redevelopment platform and position us to pursue scalable opportunities across select Mumbai micro-markets.

Proposed Amalgamation: Advancing the Regulatory Process

The proposed scheme of amalgamation remains one of the most significant strategic initiatives for Marathon.

Under the proposed scheme, key promoter-led entities owning more than 400 acres of land across Panvel, Bhandup, and Dombivli will be consolidated into the listed Company. During FY 2025-26, we received no-adverse- observation letters from both BSE Limited and National Stock Exchange of India in respect of the proposed scheme, representing an important milestone in the regulatory approval process and enabling the matter to progress to the next stage of approval. The Company has subsequently filed the scheme with the Honble National Company Law Tribunal (NCLT), and the matter is currently under consideration. Upon receipt of the requisite approvals and the scheme becoming effective, the amalgamation is expected to significantly strengthen the Companys scale, project portfolio, and long-term growth platform. The proposed amalgamation is also expected to unlock operational synergies, improve capital allocation efficiency, and strengthen our ability to pursue future growth opportunities. We remain constructively engaged with the regulatory process and focused on achieving a smooth and timely implementation. In the meantime, our existing business continues to deliver strong operational and financial performance, providing a solid foundation for future growth.

Operational Review

FY 2025-26 witnessed steady operational performance across both our residential and commercial portfolios. The Company sold approximately 2.29 Lakh sq. ft. with a booking value of Rs. 576 crores (MNRL Share). Collections stood at Rs. 781 crores, reflecting healthy cash conversion and construction progress across projects. Including the post-merger portfolio, pre-sales stood at Rs. 832 crores and collections stood at Rs. 1,048 crores.

Marathon Futurex, our flagship Grade A commercial development in Lower Parel, recorded 30% year-on-year growth in pre-sales on a pre-merger (MNRL) basis. On a combined post-merger basis, pre-sales increased 15% year-on-year to Rs. 466 crores. The asset continues to benefit from its strategic location and sustained demand for premium commercial space, reinforcing the strength of our commercial real estate platform. Monte South recorded pre-sales of Rs. 391 crores on a 100% project basis during FY 2025-26.

The project continued to witness healthy demand, supported by its differentiated offering and premium positioning. During the year, Tower B received its Occupation Certificate up to the 45th floor, marking a significant execution milestone and enhancing buyer confidence.

Marathon Nexzone contributed pre-sales of Rs. 104 crores during the year. A key milestone was the launch of Phase 3, comprising approximately 4.9 Lakhs sq. ft. of carpet area with an estimated GDV of Rs. 600 crores, further strengthening the projects future sales pipeline. In addition, the Antilia, Triton, and Atria towers received full Occupation Certificates during the year. The continued development of infrastructure around Panvel, including the operationalisation of the Navi Mumbai International Airport, is expected to support long-term demand in the micromarket.

Our Neo portfolio, comprising NeoValley, NeoPark, and NeoSquare, generated pre-sales of approximately Rs. 65 crores during FY 2025-26. NeoSquare received its Occupation Certificate during the year, while the launch of new projects under the NeoHome series, with an estimated GDV of Rs. 370 crores, further strengthened our residential development pipeline. Bhandup is a micro-market undergoing a structural demand upgrade: the planned Goregaon-Mulund Link Road, Mumbais fourth East-West corridor will materially improve the areas connectivity to Goregaon when operational, enhancing residential appeal and supporting absorption. Marathons established presence in Bhandup through our Neo Series, under which we have already sold over 1,200 units, positions us well to benefit from the anticipated demand inflection in the micro-market.

Millennium (in Mulund) contributed pre-sales of approximately Rs. 21 crores, reflecting consistent demand for quality small-format office space in the suburban MMR market.

Overall, our operational performance during FY 2025-26 reflects the benefits of a diversified portfolio spanning residential and commercial developments across multiple micro-markets. Continued project execution, new launches, and improving infrastructure across key locations position us well to capitalise on future growth opportunities.

Financial Review

Our consolidated total income for FY 2025-26 stood at Rs. 639 crores. However, reported revenue does not fully reflect the scale of underlying business activity due to accounting treatment. Adjusted for our 40% share of Monte South joint venture revenue (Rs. 152 crores), which is not consolidated, and the gross sales value at Marathon Futurex (Rs. 155 crores) where investment property classification results in only the profit portion being recognised under accounting standards, adjusted total income stood at Rs. 858 crores. We believe this provides a more representative view of our underlying business activity during the year. We also delivered strong profitability during the year. EBITDA stood at Rs. 261 crores, translating into an EBITDA margin of approximately 41%.

PAT stood at Rs. 206 crores, the highest in our history, with a PAT margin of approximately 32%. This performance was supported by a favourable project mix, healthy contributions from both residential and commercial assets, and continued cost discipline. A key milestone during FY 2025-26 was our transition to a net debt-free balance sheet following the successful completion of the Rs. 900 crores QIP. This significantly strengthened our financial position and enhanced our ability to pursue growth opportunities. Consolidated total equity stood at approximately Rs. 2,330 crores as of 31 March 2026, while total assets increased to Rs. 2,760 crores.

Looking ahead, Marathon is uniquely positioned to capitalise on structural growth reshaping the MMR. Our FY 2026-27 priorities are clear: accelerate cash generation from core assets, execute value-accretive acquisitions, and scale emerging business verticals. Our diversified portfolio- luxury residential (Monte South), Grade A commercial (Futurex), and Affordable Housing/Townships (Neo Series & Nex Series)-generates predictable cash flows. The Rs. 900 crores QIP has fortified our balance sheet, enabling strategic capital deployment across our development pipeline and new acquisition opportunities. Infrastructure catalysts-Navi Mumbai International Airport, Atal Setu, and Goregaon-Mulund Link Road-are unlocking significant pricing and absorption potential in peripheral markets. Our 418-acre post-merger land bank, strategically positioned across growth corridors, represents substantial value optionality. The emerging PTC-led B2B vertical introduces differentiated revenue streams. With net debt-free positioning, in-house execution capabilities and a substantial development pipeline, we are confident in delivering mid-to-high teen returns on invested capital, while maintaining disciplined capital allocation and operational excellence.

SWOT Analysis

While these industry-wide threats and macroeconomic headwinds present challenges for the broader market, their impact is significantly mitigated for well-established, institutional developers like Marathon Nextgen Realty. Backed by a debt- free balance sheet, a strong capital foundation, deep low-cost land reserves, and fully integrated in-house design and execution capabilities, the Company possesses the operational resilience and financial flexibility to navigate cost pressures, command premium pricing, and selectively capitalise on premier growth opportunities where others face constraints.

Financial Performance

Key Ratios (Standalone)

Execution Excellence: The Hidden Competitive Advantage

Our in-house construction platform built around advanced formwork systems (Kumkang and PERI), on-site batching plants, and a vertically integrated project management function, is the operational backbone of its execution record. MNRL continues to leverage integrated construction capabilities, on-site infrastructure, and a network of channel partners to support execution and sales. These capabilities enable consistent sales velocity, timely delivery, and operational efficiency across projects.

^In-House Delivery Driving Speed, Cost Control, and Sales Velocity

The 65-storey towers at Monte South are being constructed entirely in-house. This enables MNRL to maintain control over timelines and reliably commit to Occupation Certificate milestones without dependence on external EPC contractors.

Integrated execution provides cost visibility and control across procurement, quality, and scheduling, reducing exposure to construction cost inflation observed across Tier 1 cities in recent years.

MNRL operates on-site batching plants and material testing laboratories, and sources high- specification components from global suppliers.

A custom-built CRM platform, integrated with automated customer communication and virtual interfaces, is complemented by a network of over 250 active channel partners.

Risk Mitigation

Human Resources

At Marathon, people remain the cornerstone of value creation. We continue to align our human resource framework with business growth and execution priorities The focus remains on building capability across project execution, sales, and functional roles, supported by structured workforce planning and performance

management systems. Training and development initiatives are aligned with evolving business needs, including digital adoption and cross-functional exposure, to strengthen execution efficiency across projects.

We have also maintained a performance-linked culture with defined accountability and progression pathways, enabling us to support ongoing expansion while maintaining operational consistency.

Internal Control Systems

Marathon maintains a comprehensive internal control framework that is aligned with the scale and complexity of our operations.

Key elements include:

7> Clearly defined processes and accountability structures

7i Periodic internal audits and independent reviews

71 Risk-based monitoring mechanisms

7i Financial and operational control systems

These systems are reviewed and strengthened on a continuing basis to ensure transparency, regulatory compliance, and operational integrity across all business functions.

Disclosure of Accounting Treatment

The financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and applicable Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013. The accounting policies have been consistently applied and reflect a true and fair view of the Companys financial position.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections and expectations may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially due to various risks and uncertainties, including economic conditions, regulatory changes, and other external factors beyond the Companys control. The Company undertakes no obligation to publicly update these statements to reflect subsequent events or developments.