Ansal Housing Ltd Management Discussions

ECONOMIC OVERVIEW

1) Global Economy

The global economic narrative in 2025 has been dominated by an unpredictable geopolitical and trade policy environment. While most major markets are expected to see positive economic growth this year, the evolving outlook has weighed on business confidence and financial markets.

Global growth is projected to decline after a period of steady but underwhelming performance, amid policy shifts and new uncertainties. Global headline inflation is expected to decline further, notwithstanding upward revisions in some countries. Risks to the outlook are tilted to the downside. Escalating trade tensions and elevated policy-induced uncertainty may further hinder growth. Shifting policies could lead to abrupt tightening of global financial conditions and capital outflows, particularly impacting emerging markets. Demographic shifts threaten fiscal sustainability, while the recent cost-of-living crisis may reignite social unrest. More limited international development assistance could push low-income countries deeper into debt, jeopardizing living standards. At this critical juncture, policies need to be calibrated to foster international cooperation while ensuring internal economic stability, thereby helping reduce global imbalances. While real estate markets were generally resilient during the first quarter, an atmosphere of unpredictability has weighed on business confidence and put renewed focus on supply chains. Most major markets are expected to see positive growth this year, but the outlook is dynamic and depends on U.S. trade policy and the trade, fiscal and monetary response from across the rest of the world.

2) Indian Economy

India is poised to lead the global economy once again, with the International Monetary Fund (IMF) projecting it to remain the fastest growing major economy over the next two years. According to the April 2025 edition of the IMFs World Economic Outlook, Indias economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a solid lead over global and regional peers.

Indias economic outlook for 2025 and 2026 remains one of the brightest among major global economies, as highlighted by the IMF. Despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic growth. Supported by strong fundamentals and strategic government initiatives, the country is well-positioned to navigate the challenges ahead. With reforms in infrastructure, innovation, and financial inclusion, India continues to enhance its role as a key driver of global economic activity. The IMFs projections reaffirm Indias resilience, further solidifying its importance in shaping the global economic future.

INDUSTRY OVERVIEW Real Estate Sector

Indias real estate sector has shown impressive resilience and growth, driven by market forces and government actions. Forecasts suggest it could reach a trillion-dollar valuation by 2030, driven by strategic investments and technological advancements. Major cities such as Mumbai, Pune, Hyderabad, and NCR play crucial roles, driving demand in residential and commercial markets due to their economic vibrancy, cultural richness, and population growth. These urban centers are focal points for significant real estate development and investment opportunities. As India progresses from a low-income to a mid-income nation, the real estate sector is poised to play a pivotal role in driving economic growth, mirroring the trajectories of other economies undergoing similar transformations. The sectors deep connections with industries such as steel, cement, and construction materials are anticipated to generate substantial employment opportunities, thereby stimulating housing demand.

Furthermore, the integration of technology and sustainability principles has reshaped Indias real estate landscape. Innovations such as smart homes leveraging cutting edge technology and data-driven insights are increasingly shaping decision-making processes within the sector. Sustainability has emerged as a central theme, influencing construction methods and designs with a strong emphasis on energy efficiency. This dual commitment to technology and sustainability underscores a progressive outlook, aligning the sector with global benchmarks and fostering continual innovation.

Industry structure and developments

The real estate sector is one of the most globally recognized sectors. It is a beneficiary as well as a contributor to Indias economic growth. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs. The Indian real estate market is projected to experience a substantial increase, potentially reaching a value of US$ 5-7 trillion by the year 2047, with the possibility of surpassing US$ 10 trillion. Indias physical retail landscape is poised for a substantial boost, with nearly 41 million sq. ft of retail developments set to be operational between 2024 and 2028 across the top 7 cities, encompassing projects in various stages from construction to planning. For the first time, gross leasing in Indias top 7 markets surpassed the 60 million sq ft mark, reaching an impressive total of 62.98 million sq ft, marking a substantial 26.4% increase compared to the previous year. Notably, the December quarter emerged as the busiest quarter on record, with gross leasing hitting 20.94 million sq ft. Some of the major investments and developments in this sector are as follows:

• Indian real estate sector has witnessed high growth in the recent times with rise in demand for office as well as residential spaces.

• Indian real estate attracted Rs. 35,300 crore (US$ 4.15 billion) in private equity (PE) investments in 2024, marking a 32% annual increase, according to Knight Frank Indias Trends in Private Equity Investment in India 2024 report.

• Construction is one of the largest sectors in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at Rs. 3,83,229.78 crore (US$ 44.46 billion) from April 2000-September2024.

• In 2024, retail leasing in India reached approximately 6.4 million square feet across the top eight cities, driven by a positive outlook from retailers, especially in the H2 CY24.

• Foreign investors pump around US$ 3.1 billion yearly into Indian real estate, with a 37% YoY increase in foreign inflows in the first half of 2024.

• In the Union Budget 2024-25, under PM Awas Yojana Urban 2.0, housing needs for one crore urban poor and middle-class families will be met with a Rs. 10 lakh crore (US$ 120.16 billion) investment, including Rs. 2.2 lakh crore (US$ 26.44 billion) in central assistance over the next 5 years.

• In the 2024-25 Interim Budget, Union Minister of Finance, Ms. Nirmala Sitharaman announced a boost for Indias affordable housing sector by adding two crores more houses to the flagship scheme PMAY-U.

• In order to revive around 1,600 stalled housing projects across top cities in the country, the Union Cabinet approved the setting up of Rs. 25,000 crore (US$ 3.58 billion) alternative investment fund (AIF).

• Government created an Affordable Housing Fund (AHF) in the National Housing Bank (NHB) with an initial corpus of Rs. 10,000 crore (US$ 1.43 billion) using priority sector lending short fall of banks/ financial institutions for micro financing of the HFCs.

Another area which saw significant improvement is use of technology to enhance efficiency with renewed focus on design and incorporation of sustainable and green building concepts. With tools like Building Information Modeling (BIM), AI, drone tech etc., Real estate developers are bringing in higher efficiency into the development process, while improving their adherence to environmental norms. Indias robust macroeconomic fundamentals, including a large domestic market and a young, expanding workforce, contribute to its economic strength. The governments sustained focus on policies promoting manufacturing and innovation further enhances its growth potential. Domestic consumption remains a key driver and as the middle class expands and urbanization continues, the demand for homes is poised to rise.

The overview and outlook for different segments of the industry is given below: a) Residential Segment Demand for Affordable Housing

The market for affordable real estate has evolved from simple boxes to well-planned areas. Homeownership is now more accessible than ever thanks to government initiatives like the Pradhan Mantri Awas Yojana (PMAY). Think of it as democracy in real estate, as developers in 2025 concentrate on creating small, affordable homes in suburban locations that appeal to middle-class families and first-time purchasers.

Rise of Luxury Real Estate

With HNIs looking for exclusivity, state of the art amenities, and prime locations, luxury real estate in India has completely changed. Leading this market are cities like Bangalore, which provide luxurious homes with private offices, concierge services, and smart home amenities. Were referring to residences that anticipate your demands in addition to providing for you.

Emergence of Micro-Markets

Smaller cities and the suburbs are becoming popular places to invest since they provide more reasonably priced options and the possibility of future growth. Bangalore neighbourhoods like Whitefield and Sarjapur, which draw families and young professionals, are excellent illustrations of this tendency. These specialised pockets demonstrate that good things do come in little packages by providing the ideal balance of cost and facilities.

Sustainable Housing

Growing awareness of the environment and cultivating the need for healthier living environments are fuelling the growth of eco-friendly and sustainable housing projects. From having plenty of greenery around the property to ensuring that sustainable choices are made at every point possible, modern homebuyers are making well-thought-out decisions that can affect the planet. b) Retail Segment

Indias retail sector is expected to maintain its growth momentum in 2025 as malls continue to refine their tenant mix and offer dynamic shopping, entertainment, and dining experiences. International and domestic brands across various categories are likely to remain key drivers of leasing growth. It is estimated that the organized retail constitute about 15% of the total retail space in India. Further Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from present US$ 790 billion and contribute 13 per cent of the countrys GDP by 2025. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. Commercial Segment has consolidated growth trajectory owing to improved business sentiments and rising growth prospects in the IT/ITES sector attributed to improving macro-economic dynamics and corporate expansion. Commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs. While online shopping has threatened the retail sector, the market is adapting to the competition by offering malls and retail spaces that provide immersive experiences to attract consumers. These immersive experiences focus on delivering a complete package of leisure, entertainment, and dining options to patrons over mere product sales. c) Office Segment

The growing prominence of India as a global business hub has resulted in heightened demand for Grade A office spaces, particularly in key cities such as Mumbai, Bangalore and Delhi NCR. The influx of multinational corporations, startups, and technology firms has led to a surge in the need for modern office spaces that are well-equipped and come with amenities like co-working areas, conference rooms, and recreational facilities. Premium office locations command high rents and attract top-tier tenants, thus driving investment and development activity in this segment. Despite global uncertainties, the office segment is expected to remain positive on account of expansion by Global Capability Centres, reasonable advantages that India offers to global occupiers, in terms of skilled talent pool, competitive cost structures and occupiers driving their workforce to return to office. The current trends in the real estate market in India reveal that offices are not just about chairs and working times. Theyre adapting to support hybrid work environments. Flexible office spaces and co-working options are being sought after as businesses seek affordable alternatives to keep their productivity intact. Moreover, IT corridors and startup hubs are fuelling real estate trends in Bangalore and other technology-driven cities.

OUTLOOK

Indias economic outlook remains positive, demonstrating resilience amidst persistent global economic headwinds. Stabilising inflationary trends have enabled the RBI to reduce the key policy rate in February 2025-the first such adjustment in five years. Further policy rate adjustments could be anticipated in the subsequent quarters, contingent upon suitable domestic and international economic conditions.

BUSINESS/ FINANCIAL PERFORMANCE. The Companys business continues to exhibit robust performance. During the financial year 2024-25, the net revenue for the standalone entity has slightly decreased to 38398.83 Lakhs from 38935.26 Lakhs in the previous year showing a slight decrease of around 1% and the earnings before interest, tax, depreciation and amortization (EBITDA) decreased to 3786.99 Lakhs from 7207.21 Lakhs in the previous financial year.

Particulars	FY 2024-25	FY 2023-24
Total income from operations	38398.83	38935.26
EBITDA	3786.99	7207.21
Profit before tax	6672.60	533.33
Profit after tax	1913.93	375.41

REVIEW OF OPERATIONS

The Company is mainly indulged in the activities related and associated with development and sale of residential real estate which include plotted developments, houses, villas and apartments of varying sizes and integrated townships and also the high end, luxury residential projects. Apart from these, the development business also includes certain commercial and shopping complexes, including the ones that are integral to the residential developments.

Details of significant changes in the Key Financial Ratios in comparison with the previous financial year alongwith detailed explanations for such changes:

Ratio	FY2024-25	FY2023-24	Percentage	Explanation for Significant Change
			Variance
Debtor Turnover Ratio	3.55	3.46	-3.24%	No explanation required.
Inventory Turnover Ratio	0.30	0.22	34.24%	There has been improvement in this ratio as compared to the previous
				year. There were few projects in the current year where the substantial
				completion has been achieved and accordingly revenue has been
				recognised in the current with corresponding charged off of the inventory
				(WIP) to the statement of profit and loss. The ratio indicates, how fast,
				effectively/ efficiently the inventory sold is recognised in the statement
				of profit and loss, based on operating cycle of the Company.
Interest Coverage Ratio	1.20	1.07	11.96%	No explanation required.
Current Ratio	1.14	1.00	13.68%	No explanation required.
Debt Equity Ratio	2.38	3.55	-33.03%	There has been improvement in this ratio, as the Company has
				substantially reduced its debt in the current year, resulting in Lower Debt
				equity Ratio as compared to previous year. The reduction in this ratio
				also resulted in the reduction of interest liability thereby making more
				funds available for the purpose of working capital.
Operating Profit Margin	15.29	26.82	-43.01%	There has been reduction in the Operating Margin, as the projects which
				achieved substantial completion resulting in recognition of the revenue,
				are Built-up Projects, where the margins are generally less as compared
				to the plotted development.
Net Profit Margin	-11.32%	0.85%	-1435.38%	There has been slight improvement in the NP Margin before tax in the
				current year, however, due to recognition of income on which tax was
				paid in earlier, there has been reversal of deferred tax assets in the
				statement of profit and loss, resulting in NP margin (after tax) negative.
				So, effectively, the financial impact is positive and needs to be holistically
				studied after breaking the margin in two parts as explained above.
Return on Net Worth	-34.36%	3.22%	-1166.28%	This ratio again has to be holistically studied by taking out the impact of
				deferred tax assets reversal as explained in the NP Margin ratio above.
				There has been slight improvement in the NP Margin before tax in the
				current year after taking out the impact of deferred tax reversal, which
				highlights that the company is managing its resources efficiently/
				effectively.

OPPORTUNITIES

Indias real estate market is among the fastest growing in the world, driven by the countrys rapid urbanization, economic expansion, and changing demographic trends. The Indian economy expanded 7.6 percent year-on-year in the quarter ending September, further reinforcing its resilience. The International

Monetary Fund (IMF) forecasts India to emerge as the worlds third-largest economy by 2027 with GDP expected to exceed US$5 trillion. Indias real estate market is witnessing profound changes due to economic growth and shifting population dynamics. Economic expansion, projected to grow at 6.5 percent in the fiscal year 2024-25, has created an environment conducive to property development, particularly in urban areas. The governments focus on infrastructure development, coupled with a youthful workforce eager for urban living, drives this momentum. The experts in real estate sector have identified the following opportunities for the sector: a. PropTech Innovations:

• AI-powered property valuation platforms

• Virtual property tours

• Blockchain-enabled transparent transactions

• Smart building technologies b. Smart Cities Mission

The Smart Cities Mission is the Indian governments initiative to enhance citizens quality of life in participating cities and towns with the aid of digital and information technology, best practices, and public-private partnerships. The Union Ministry of Urban Development has collaborated with state governments to execute this mission to make cities more people-friendly and sustainable. Since housing is a crucial requirement for the growth of the Smart Cities Mission, these cities are likely to witness a proliferation of residential projects, providing ample investment opportunities. c. Housing Demand

The pandemic has encouraged a lot of fence-sitters to convert into first-time home buyers and existing ones to upgrade to larger homes by reestablishing the security that homeownership offers, resulting in rising housing demand across segments. An expected economic recovery along with the belief of housing prices bottoming out amongst consumers and rising income levels are some of the factors which will drive the housing demand going ahead. Hybrid working models will also continue to drive demand for larger homes. Employers are expected to continue to offer flexibility to their employees in order to attract and retain talent. d. Over-population

India is touted to be the most populous country by the year 2050. More than 50 per cent of people are urban centers and Tier 1 cities. To accommodate the population, India would require more new cities and urban centers on a mass scale in order to provide the required resources to the inhabitants. e. Digital Real Estate Sales

Over the past few years, digital marketing has emerged as an important tool for real estate developers to boost their sales and reach out to customers globally. While the earlier marketing activities were limited to building consumer experience and establishing connection through digital means, the pandemic has forced the developers to change their conventional sales models. Developers who have been able to migrate their sales process from on-boarding of customers to closing the deal online, have recorded healthy sales even during the lockdown. Digital collaboration tools can be leveraged by the developers to interact with potential customers, showcase project brochures, facilitate virtual site tours, and focus on NRIs to propel the sales. Going ahead, it will be imperative for the developers to adapt to a tech-savvy future in terms of digital platforms for sales and marketing and also introduce enhanced automation at sites.

THREATS & CHALLENGES

The real estate industry faces a slew of internal and external challenges as it heads into 2025. They include operational hurdles, such as inaccurate financial reporting and fragmented data systems, and broader market pressures, such as rising interest rates and housing affordability concerns. Organizations that take a proactive approach to addressing these challenges—through strategic planning, process improvement, and technological solutions—can build resilience against market uncertainties while creating opportunities for future expansion. While the management of your Company is confident of creating and exploiting the opportunities, it also finds the following challenges: a. Artificial intelligence innovations

ChatGPT pushed AI more into the mainstream over the past year, and more real estate professionals are seeking to adopt the technology. "AIs role in real estate is rapidly evolving, with focus shifting to the accuracy, granularity and timeliness of data inputs that drive algorithms," CRE says. "While AI can optimize certain processes, commercial real estate still faces challenges with fragmented data and location-specific nuances." Further, AI algorithms require a huge amount of computing power, likely leading to a boom in data centre developments.

b. Market Volatility and Risk Management

The prevalent economic conditions, market sentiment, policy changes, or other factors may cause real estate prices to fluctuate. Although the real estate market is not generally volatile, and price fluctuations are not frequent, adopting a few risk mitigation measures is essential to effectively balance your risk and reward. c. Regulatory Hurdles

Real estate sector is a highly regulated sector and any unfavourable changes in government policies and the regulatory environment can adversely impact the performance of the sector. There are substantial procedural delays with regards to land acquisition, land use, project launches and construction approvals. Retrospective policy changes and regulatory bottlenecks may impact profitability and affect the attractiveness of the sector and companies operating within the sector. d. Long Pending Infrastructure Projects

There are a lot of impending projects in the Indian real estate market starting from public sector projects to private sector housing colonies. There is a delay happening in the completion of these projects and the reason for this is that the project does not get enough funding or there is a lack of technology to complete these projects on time. Another big challenge in the Indian real estate sector is the protracted approval process because project approvals in India take about days to years because there is no option of a single-window clearance and it often results in time and cost escalations. e. Outdated Building Techniques

The Indian real estate sector is still dependent on old building techniques and hence they are over-dependent on extensive human labour for construction activities. Whereas, high-quality building materials such as concrete and iron slabs are used in new construction techniques. Therefore, today it is very important for developers to rely on modern building techniques which will help reduce construction time and labour cost and in that way the projects can be delivered fast. f. Monetary Tightening

There has been a contrasting trend in real estate lending over the past few years wherein reputed, low leveraged developers continued to enjoy easy access to liquidity as lenders remained selective and weaker developers struggled with limited sources of capital. Real estate sector performance is closely linked to economic recovery and its monetary policies. The Reserve Bank of India has so far maintained accommodative stance as it tries to support economic recovery. However, going ahead we expect to see monetary tightening as the central bank tries to control inflation in the country. A nascent economic recovery along with rising interest rates could impact the real estate sector in the near term as cost of housing loans shoots up with rise in the cost of funding for the developers, who are already facing margin pressure due to commodity cost inflation.

PROSPECTS & OUTLOOK

Indias economic outlook remains positive, demonstrating resilience amidst persistent global economic headwinds. Stabilising inflationary trends have enabled the RBI to reduce the key policy rate in February 2025. Further policy rate adjustments could be anticipated in the subsequent quarters, contingent upon suitable domestic and international economic conditions.

Residential demand is anticipated to sustain its momentum, driven by the mid-income and premium segments, while affordable housing may face ongoing affordability pressures. Developers are expected to strategically pivot towards well-connected suburban hubs and Tier-2 cities, leveraging infrastructure-led growth corridors. Cities like Jaipur, Bhubaneswar, Nagpur, and Vishakhapatnam are becoming growth hotspots due to increased government focus on regional development and rising employment opportunities outside of traditional metros. Developers are shifting focus from high-end to volume-based affordable projects that offer greater sales velocity and cater to the aspirations of Indias growing middle class. At the same time, the concept of "live-workplay" communities—self-sustained townships offering integrated amenities—is gaining momentum among urban homebuyers.

Commercial real estate will likely remain robust, fuelled by the continued expansion of global capability centres (GCCS), technology sector leasing, and growing tenant demand for flexible, ESG-compliant Grade A office spaces. Digitalisation, tenant experience upgrades, and smart asset management will become increasingly critical for maintaining occupancy and rental growth. Office spaces will not disappear but will evolve to become more flexible, collaborative, and technology-enabled. The demand for Grade A offices, tech parks, and managed co-working spaces is expected to remain strong, especially in IT hubs like Bengaluru, Hyderabad, Pune, and Chennai. Further, India is fast becoming a global hub for data centres, thanks to the exponential rise in digital consumption, which is attracting heavy investment from technology firms and global investors

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems and procedures commensurate with the size and nature of business. These procedures are designed to ensure the following:

• Effective & adequate internal control environment is maintained across the Company.

• All assets and resources are acquired economically, used efficiently and are adequately protected.

• Significant financial, managerial and operating information is accurate, reliable and is provided timely; and;

• All internal policies and statutory guidelines are complied with.

The effective implementation and independent monitoring of internal controls and processes is done by the Internal Audit. The Audit Committee of the Board reviews the Internal Audit findings and provides guidance on internal controls. It ensures that Internal Audit recommendations are effectively implemented. The Audit Committee of the Company met four times during the financial year 2024-25. It reviewed, inter-alia, the adequacy and effectiveness of the Internal Control Systems and monitored implementation of Internal Audit recommendations and overlooked other financial disclosures. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

RISKS AND CONCERNS

The management of the company is well aware about the major risks and threats posed to the industry in which the Company operates viz., economic, regulatory, taxation and environmental risks and also the investment outlook and strategy that prevails in the Indian Real estate sector. The risks that may impact the normal functioning of operations of the Company and its potential for future developments may include Market risk, Inflation risk, liquidity risk, counter-party risk, commodity risk and credit risk etc. The Audit Committee and the Board of Directors of the Company have been implementing proper and appropriate risk management policies and guidelines in order to develop a proper base for tolerance of risk. The Company has developed a proper framework and process for monitoring of the exposures to risks and to implement the measures in timely and effective manner. Also, it is constantly reviewed by the management for further development and improvement. The Company also has a very strong in-house Legal Department to take care of Legal and Regulatory Risks in routine. The requisite insurance covers are also taken by the Company for covering the disasters etc.

HUMAN RESOURCES

Human Resource asset is the most important factor for the Companys business operations and its growth. The main focus continues to be on the development of key talent, working closely with our outsourced partners in various areas of our operations and ensuring optimum utilization of manpower in coordination with the Companys business strategy. The company conducts consultations, dialogues, deliberations, negotiations and meetings in a congenial environment and arrives at amicable solutions to issues that crop up from time to time. Our Reward & Recognition/ incentive programme continues to strive to build culture of meritocracy and strengthen alignment of performance and reward.

As on 31st March, 2025, the Companys "on rolls" talent pool comprised of 193 employees.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis contain certain forward looking statements within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include a downward trend in the real estate development industry, rise in input costs and significant changes in political and economic environment, environment standards, tax laws, litigation and labour relations etc. The shareholders and readers are cautioned that in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable.