Capacite Infraprojects Ltd Management Discussions

Economic Overview

Indian Economy¹

IndiaseconomyremainedstableandresilientinFY2025,recording a GDP growth at 6.5%, closely aligning with the countrys decadal average. This growth was driven by strong private consumption, improved business investment and a recovery in rural demand. Supportive government policies, improved credit availability and capital inflows also contributed to strengthening Indias economic activity. The uptick in domestic demand, particularly in discretionary spending and employment levels, contributed significantly to broad-based economic expansion.

Retail inflation in India, measured by the Consumer Price Index (CPI), eased to 4.6% in FY 2025. Reflecting a positive shift in the countrys price stability. In March 2025, the year-on-year inflation rate declined further to 3.34%, indicating continued relief for consumers. While urban housing inflation saw a slight rise to 3.03% in March from 2.91% in February, this change mainly reflects residential housing costs and does not capture the full picture of inflation across the broader construction sector, such as material prices and labor. The encouraging drop in overall inflation is largely the result of effective monetary policy by the Reserve Bank of India and timely government measures, including better supply management and targeted subsidies, which helped keep prices under control and supported household budgets.

The industrial sector recorded growth of 6.2%, supported by a strong performance in construction, electricity and other utilities. Government-led capital expenditure grew by 8.2%, underlining its focus on infrastructure-driven growth. Physical infrastructure saw notable improvements as over 2,000 km of railway lines were added and port operations became more efficient. These efforts not only enhanced connectivity but also reduced logistics costs, making the operating environment more efficient for developers and contractors.

For the Engineering, Procurement and Construction (EPC) sector, particularly in urban infrastructure and real estate, the macroeconomic backdrop remains favourable. The Government of Indias continued push for smart cities, mass housing, transport hubs and public infrastructure projects created more opportunities for the sector. India is seeing strong growth in healthcare, manufacturing, and data center infrastructure. Health care sector spending has nearly doubled in four years, with INR 99,859 crore set aside in the FY2025 , and a clear focus on building medical facilities and using digital tools. The governments Production Linked Incentive (PLI) schemes have boosted factory demand by encouraging manufacturing in sectors like electronics and pharma, leading to more jobs and higher exports. At the same time, the data center industry is growing fast, with capacity expected to nearly double by FY 2026, driven by digital growth, 5G, and new investment worth around INR 50,000 crore. Together, these sectors are helping to build a stronger foundation for Indias future economic growth.

Outlook

Indias economy is expected to keep growing steadily. The countrys GDP is projected to grow to 6.5% in FY 2026, supported by strong domestic demand, a stable policy environment and rising private investment. The economic growth remains positive, especially with continued government focus on infrastructure, urbanisation and digital connectivity.

Inflation is expected to moderate further. Retail inflation, which softened to 4.6 in FY 2025, is projected to align closer to the RBIs target of 4% in FY 2026. This decline is mainly due to stable commodity prices and continued monetary management by the central bank. For the construction and infrastructure sector, these trends are highly favourable. Economic growth and low inflation create a more stable environment for project financing, tendering and execution. Government capital expenditure is likely to remain a key driver, with ongoing investments in housing, public transport systems, smart cities and institutional and healthcare infrastructure. As urban expansion continues and more large-scale projects are rolled out, companies in the sector are expected to see higher order inflows, improved operating margins and greater opportunities in both public and private sector.

Industry Overview

Indias Construction Sector

The construction sector remains a major contributor to Indias GDP, accounting for approximately 8% of the countrys economic output. In FY 2025, the sector sustained its growth, driven by increased government spending on infrastructure. It recorded a year-on-year revenue growth of 12–15%, following an even stronger growth of 18–20% in FY 2024. Although growth moderated slightly due to a high base effect and temporary delays in project execution during the parliamentary elections, the sectors overall trajectory remained robust and resilient.

The Engineering, Procurement, and Construction (EPC) segment, an important part of the construction sector, with steady revenue growth of 12–15% in FY2025 compared to 18–20% seen in FY2024. The main reason for this positive trend is the Indian governments continued focus on infrastructure and higher spending in this area. Key projects in roads, metros, airports, bridges, flyovers, and buildings both residential and commercial make up a large part of the work for EPC sector. The order book was about 3.9 times the yearly sales, showing good business visibility for the future. Operating margins for the sector reaching 11.5% to 12.0% in FY2025, helped by better use of resources and stable prices of raw materials. Although competition remains strong and the end of the Atmanirbhar scheme may raise working capital needs, the overall business environment, with more investments and easier financial conditions, continues to support growth in the EPC sector.³

Outlook

Urban Development⁴

India continues to witness a steady shift in population from rural to urban areas, driven by the promise of better employment, education and quality of life. Urban development is closely tied to the construction industry, which plays a central role in shaping growing cities. More than half of the worlds population now lives in urban areas which is expected to rise to nearly 70% by 2050. This ongoing urban migration, supported by a growing population, is fuelling consistent demand for housing and infrastructure across major cities. The construction industry plays a key role in supporting this growth by delivering modern, efficient and resilient urban spaces. Rising demand for affordable and mid-segment housing continues to shape the urban landscape, while the growing presence of High-Net-Worth Individuals (HNIs) and Non-Resident Indians (NRIs) is expected to influence the development of premium and luxury segments.

Affordable Housing⁵

Affordable housing continues to be a critical need in India, driven by factors such as rising urbanisation, migration to economic hubs and the widening disparity between income levels and property prices. In metropolitan cities, buyers are increasingly opting for mid-range homes despite high loan burdens. However, for low-income families, affordability remains a challenge due to high interest rates and limited savings.

Demand for affordable housing is rising in semi-urban and rural regions, aided by government initiatives and financial inclusion policies such as National Housing Bank (NHB). Reflecting this momentum, the sector witnessed a 30% year-on-year growth in FY 2025.

Infrastructure Investment

Infrastructure is a major driver of growth, and the central government is continuing its efforts in this area by extending the 50-year interest-free loan scheme to state governments. The budget has increased the funding for this segment to INR 1.5 lakh crore to help states spend more on building infrastructure and take up projects focusing on reforms. To attract more investment, the Government of India also plans to create a new market-based financing system and encourage private companies to take part by offering support through viability gap funding and helpful policies. In addition, Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY) has been launched to build all-weather roads to 25,000 rural villages, showing a clear plan to improve both city and village infrastructure.⁶

Smart Cities

As Indias Smart Cities Mission (SCM) approaches its 10-year milestone in FY 2025, it continues to reshape urban development across India by focusing on safety, sustainability and inclusivity through data-driven urban development. With nearly 90% of the planned 8,000 projects completed, over INR 1,64,00,000 lakhs have been invested in infrastructure, including 83,000 CCTV cameras, 52 lakh LED streetlights, 4,700 km of smart roads and 712 km of cycling tracks. The mission has led to significant improvements, such as a 27% drop in crime rates and a 23% improvement in air quality. Top-performing cities, like Raipur and Indore have demonstrated high project completion rates and effective fund utilisation. Despite facing financial hurdles, cities such as Indore and Bhopal have pioneered innovative funding mechanisms like green bonds and land monetisation, setting examples for sustainable urban financing.⁷

Green And Sustainable Construction

Indias green and sustainable construction sector is evolving rapidly. Today, the aim is to build structures that blend with nature using open-air designs, natural ventilation and greenery while adopting advanced technologies like Building

Information Modelling (BIM). BIM helps reduce waste, improve energy efficiency and supports smart building management using AI and IoT. India ranks third globally in LEED-certified buildings. Government support through tax benefits, fast-tracked approvals and green building guidelines is helping drive this shift. The future of construction lies in developing spaces that are both environmentally and economically sustainable.⁸

Related Sub Sectors In Construction Industry

Real Estate

The real estate sector is one of the most significant pillars of the Indian economy, driving growth by providing residential, commercial and retail spaces. The sector significantly contributes to Indias GDP and is also one of the biggest employment generators, fuelled by rapid urbanisation, rising incomes and strong government support for infrastructure, affordable housing and smart city initiatives. In recent years, the industry has seen a strategic shift towards sustainable and technology-driven construction, making the sector more modern, efficient and environmentally responsible.

Construction Materials

Indias construction sector is witnessing rapid expansion and plays a vital role in the nations economic development. By 2030, it is projected to contribute INR 10 lakh crore to Indias economy and generate employment for an additional 100 million people. The sector spans diverse areas including housing, offices, retail, warehouses and data centres, and is being driven by increasing urbanisation and the demand for robust infrastructure. Government initiatives such as PMAY-Urban, which has sanctioned over one crore houses and major houses investments in roads, railways and logistics. Beyond volume, there is a growing emphasis on quality, sustainability and innovation. India has emerged as a global leader in green construction, with more developers adopting eco-conscious practices and energy-efficient technologies.⁹

Emerging Technological Trends Impacting The Construction Industry

Technology is changing how construction projects are planned, designed and built. With rising demand for faster, safer and more efficient processes, the industry is turning to digital tools and smart equipment. These new trends are helping companies improve quality, reduce costs and complete work on time. The shift is also pushing the industry toward more sustainable and data-driven methods.

Digital Transformation And Smart Planning

Construction companies are now using software tools like Building Information Modelling (BIM), AI and digital twin technology to improve design accuracy and manage projects better. These tools help reduce errors, save time and improves coordination across teams.

Advanced Machinery And Automation

Construction equipment has witnessed tremendous evolution over the years, with advanced technologies being adopted to enhance their performance and efficiency. Its intriguing that modern equipment technology doesnt just focus on increasing power and speed but also prioritizes safety and sustainability.

Modern formwork technology offers advantages like increased construction speed, improved dimensional accuracy, reduced labor costs, and enhanced structural integrity. Integration of new technologies such as GPS tracking, telematics, and IoT sensorsalsohelpsinimproveefficiency,productivity,andsafety.

Focus On Green And Energy-Efficient Solutions

There is a growing focus on using sustainable materials and energy-efficient equipment. Builders are choosing tools and machines that reduce fuel use and carbon emissions. New technologies also support water saving, waste reduction and better environmental practices in construction.

Opportunities In Indias Construction Sector

Market Size And Future Growth

Indias construction sector is growing rapidly, driven by increasing demand for infrastructure such as roads, housing, healthcare, offices and retail spaces. The total market value of the sector is projected to reach $1.4 Tn by CY 2025. Real estate, a major part of this sector, is also expanding quickly and could reach $5.8 Tn by 2047.¹⁰ This includes homes, commercial buildings and shopping complexes. The construction industry plays a key role in Indias economic development, contributing significantly to national growth. It is also one of the largest sources of employment, already supporting millions of jobs and set to generate many more in the coming years.

Government Schemes¹¹

Pradhan Mantri Awas Yojana – Urban (PMAY-U)

The Pradhan Mantri Awas Yojana – Urban (PMAY-U) was launched in 2015 with the goal of providing safe and affordable homes for people living in cities. A total of 118.64 lakh houses were approved under this scheme. This is nearly nine times more than the 13.46 lakh houses approved during 2004–2014 under older schemes like Jawaharlal Nehru National Urban Renewal Mission (JnNURM) and Rajiv Rinn Yojana (RRY). Until FY 2025 88.32 lakh houses were actually built, which is 11 times more compared to the 8.04 lakh houses built from 2004 to 2014. This shows how effective the PMAY-U scheme has been in addressing urban housing needs.

Atal Mission For Rejuvenation And Urban Transformation (AMRUT)

The AMRUT (Atal Mission for Rejuvenation and Urban Transformation) scheme was also launched in 2015. Its main goal was to improve the quality of life in cities by focusing on basic amenities. It aims to ensure that every household has a tap with a regular water supply and a sewer connection. The mission also focused on increasing the green areas in cities by developing parks and open spaces. Another objection was to reduce pollution by promoting sustainable public transports and improving facilities for walking and cycling. As of February 1, 2025, the progress of AMRUT is quite evident.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

The Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched in 2000 to improve road connectivity in rural areas. It is part of the Government of Indias larger plans to reduce poverty by connecting villages to nearby towns and markets. Over the years, the programme has built a large number of roads. In 2006–2007, about 1,07,370 km of roads were completed, with a spending of INR 10,769 crore. By 2014–2015, this increased to 4,19,358 km, with an expense of INR 130,149 crore. In FY 2025, the completed roads reached 7,71,950 km and total spending rose to INR 331,584 crore. This shows the effectiveness of the scheme and the big difference it has made in rural development.

Smart Cities Mission (SCM)

Under the Smart Cities Mission (SCM), the Government of India aimed to modernise cities and make them more efficient and comfortable for the people living. A total of 8,076 urban projects were taken up under this scheme, with a combined investment of INR 1,64,706 crore. Out of these, 7,401 tasks have already been completed, worth INR 1,54,351 crore. These projects, spread across 100 Smart Cities, likely include improvements in transport, housing, digital infrastructure and public services to enhance urban livability and sustainability.

Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM).

The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) is a government scheme with a total budget of INR 64,180 crore for the period 2021–22 to 2025–26. Its goal is to improve health services at all levels primary, secondary, and tertiary and prepare the health system to handle future health emergencies. The scheme includes building new health centers, labs, and hospitals across the country. It supports states in setting up 17,788 Ayushman Arogya Mandirs in rural areas, 11,024 in urban slum areas, 3,382 Block Public Health Units, 730 district-level labs, and 602 Critical Care Hospital Blocks in large districts. While the central government gives money and guidance, state governments are mainly responsible for carrying out the work.

Indias Real Estate Market

The Indian real estate sector had a strong performance in FY2025 with housing sales crossing approximately 229,900 units in major cities. Most of this demand came from mid and high-end housing, with premium homes becoming more popular. The demand for homes with smart features like AI-based security and energy-saving systems is rising. People are also choosing to live in integrated townships that offer a community lifestyle. Government schemes like PMAY-U helped by approving over 118 lakh houses. Positive lending conditions and rising demand are likely to keep the housing market resilient.

The commercial sector also saw major growth, especially in office, retail and hospitality spaces. Office leasing touched a record 53.4 million sq. ft. with strong demand from industries like IT and banking. India is becoming a key hub for Global Capability Centres (GCCs), which is boosting office demand. Grade-A buildings with smart features are preferred and flexible workspaces are becoming popular. Retail spaces and hotels also did well due to high consumer spending and tourism. Hotel occupancy hit 67.5%, the highest in a decade. Government programs like the Smart Cities Mission and AMRUT are improving urban spaces, making cities more liveable and attractive for business.¹²

Infrastructure growth played a big role in supporting real estate and continued to remain important in FY 2025. Government capital spending rose to INR 11.11 lakh crore in FY 2025, focusing on key segments like roads, railways and airports. Improved connectivity is driving real estate growth in smaller cities. Logistics and industrial real estate sector also saw a 25% jump in demand. New areas like data centres, spaces for co-living and senior housing are attracting investors. Indias data hub capacity is expected to grow by 66% in next two years. With this strong base, real estate can play a big part in building a developed India.

Outlook

Indias real estate sector is poised to play a pivotal role in helping the country achieve its goal of a US$26 trillion GDP by 2047. At present, the sector contributes around 7–8% to the GDP, but this is expected to rise sharply in the coming years. By 2047, the real estate industry is projected to grow to US$4.8 trillion, making up about 18% of the total GDP. Over the next five to six years, it is likely to grow at a fast pace of around 13–15% annually. Even beyond that period, the sector is expected to maintain a steady growth of approximately 10–12% annually, outpacing many other sectors and emerging as a key driver of Indias long-term economic expansion.¹³

Contribution of Real Estate Sector to Indias GDP by 2047

Government Initiatives

Real Estate (Regulation And Development) Act (RERA)

RERA was introduced in 2016 to make the real estate sector more transparent and organised. It requires all real estate projects and agents to register and share regular updates online. Developers must keep a separate bank account for each project to avoid fund misuse. While RERA caused some short-term disruptions in the market, it has now improved the sector by making it more buyer-friendly, accountable and fair. In FY 2025 over 1.3 lakh projects and nearly 89,000 agents were registered under RERA and over 1.2 lakh complaints were resolved. The act has played a key role in building trust among homebuyers and making the industry more reliable.

Digital India Land Records Modernisation Programme (DLRMP)

Launched in 2016, the Digital India Land Records Modernisation Programme (DLRMP) aimed to modernise Indias land records system. As of now, over 95% of land records and most sub-registrar offices are digitised, and 60% of maps are available in digital form. This strategy helps people access land and property details online without visiting government offices. The system also supports linking property registration with other services like tax and utility records, improving transparency and saving time. Although this program has enhanced the ease of doing business, India still needs to reduce the time and cost of property registration to improve its global ranking in this area.

Benami Transaction (Amendment) Act

The Benami Transaction (Amendment) Act, 2016 was introduced to curb property transactions done in someone elses name to conceal the real owner. It set strict rules and punishments for such deals and explained how the Government of India can take over such properties. This measure has increased transparency and accountability in real estate by ensuring property titles are registered under the rightful owners name. The government has also reclaimed land with unclear ownership and repurposed it for building affordable homes.

Indexation On Property

Indexation is a method used to adjust the purchase price of a property for inflation, which helps lower the capital gains tax when the property is sold. Under the FY 2025 budget, the Government of India has proposed removing this indexation benefit for all types of assets. At the same time, it plans to reduce the long-term capital gains tax rate from 20% to 12.5%. This change has valid implications on the real estate sector in different ways. Previously, under the old system, if property prices rose only with inflation, there was little or no tax to pay because indexation increased the cost price to match the sale price. Without indexation, capital gains become higher, especially for properties held for many years, making the older system more useful in such cases. However, for properties bought recently and sold quickly, the new rules may be more beneficial since the impact from indexation would have been minimal. One notable consequence is that sellers seeking tax exemptions under Section 54 or 54F will now need to reinvest a larger amount in a new residential property, since capital gains will be higher without indexation.¹⁴

Production Linked Scheme (PLI)

The Production Linked Incentive (PLI) Scheme is a government initiative aimed at boosting domestic manufacturing across 14 key sectors, including electronics, pharmaceuticals, food processing, and telecom. By offering financial incentives to Companies based on their production output, the scheme encourages investment, job creation, and exports. As a result, it has led to a rise in new factory construction across India. The PLI scheme attracted investments worth INR 1.61 lakh crore, generated production worth INR 14 lakh crore, and created over 11.5 lakh jobs. This strong industrial push is helping develop modern manufacturing infrastructure and increasing factory demand.

National Data Centre Policy

The National Data Centre Policy, drafted by MeitY , aims to make India a global hub for data storage and processing while promoting data localization. It proposes infrastructure status for data centers, single-window clearance, and incentives like subsidized land, power, and tax benefits. The policy encourages the creation of Data Centre Economic Zones (DCEZs) with ready-to-use infrastructure and supports green, energy-efficient facilities.

PLI for Medical Devices and Pharmaceuticals

Dedicated PLI schemes for medical devices (INR 34,200 crore) and pharmaceuticals (INR 150,000 crore) are boosting domestic manufacturing and leading to the establishment of new factories and research facilities, further driving demand for specialized healthcare real estate

Indias Commercial Real Estate Market¹⁵

The commercial real estate market size in India is estimated to be around USD 40.71 billion in 2024 and is expected to grow to USD 106.05 billion by 2029, registering a CAGR of 21.1%. This strong growth shows the increasing demand for office spaces, retail outlets, business parks and commercial properties across Indian cities. Factors such as rapid urbanisation, expansion of businesses, development of infrastructure and growth in service-based industries are all helping to drive this demand. The rising interest of foreign investors and the push for more organised and modern commercial spaces are also supporting the expansion of this sector. With continued investment and development, the commercial real estate market is likely to become even more crucial to Indias economic progress.

Trends of The Commercial Real Estate Sector In India

Shift Towards Flexible Workspaces

A major trend in Indias commercial real estate sector is the growing demand for flexible workspaces like coworking spaces, serviced offices and managed offices. This shift is happening because work styles are changing, technology is improving and both companies and employees now prefer more flexible options. These workspaces offer short lease terms, and shared facilities such as meeting rooms, internet and recreational areas. They also help businesses save on upfront costs compared to traditional offices. The demand is especially high in big cities like Mumbai, Delhi-NCR, Bangalore and Hyderabad. Startups, freelancers and even large global companies are choosing these flexible options to stay agile. The rise of remote work and the gig economy has further pushed this trend. Developers and property owners are investing more in such spaces and many landlords are teaming up with coworking operators or starting their own flexible workspace brands. Companies continue to focus on flexibility and the well-being of its employees, while the demand for modern, tech-enabled flexible workspaces is expected to keep growing.

Sustainability And Green Buildings

A trend in Indias commercial real estate sector is the growing focus on sustainability and green building practices. More and more buildings are being designed to save energy, use fewer resources and reduce harm to the environment. This is because tenants, investors and regulators are becoming more aware of environmental issues. Green buildings, which are often certified under standards like LEED and IGBC, include features such as solar panels, rainwater harvesting, green roofs and designs that improve natural air flow and light. These buildings help lower electricity and water bills, reduce pollution and create healthier workplaces. Government policies like the Energy Conservation Building Code (ECBC) and incentives for eco-friendly projects are encouraging this trend. Many companies, especially large global firms, now prefer to rent space in green-certified buildings to meet its sustainability goals. Some developers are even upgrading old buildings to make them more eco-friendly. As more people care about climate change and health, the focus on green, sustainable buildings is expected to grow even more in the coming years.

Opportunities Of Indias Commercial Real Estate Sector

Technology And Better Infrastructure

New technology is changing the way offices are built and used, with more demand for smart and flexible office spaces. At the same time, big improvements in transport, energy and communication help connect different areas better. Projects like the Delhi-Mumbai Industrial Corridor and Smart Cities Mission are improving cities and attracting new business buildings. More metro lines, highways and railway projects are helping new commercial areas grow outside the main city. In the FY 2025 budget, the Government of India set aside INR 5 lakh crore for infrastructure and INR 11.11 lakh crore as total capital spending, including money for roads, metro rail and other city development programs.

Young Population And Changing Lifestyles

Due to the changing habits of Indias young and growing middle class, the demand for new malls, shopping areas, and entertainment spaces is increasing. As more people migrate to cities, there is a rising need for integrated developments that combine residential, commercial, and retail spaces. Additionally, expanding healthcare and education sectors are driving the construction of specialized infrastructure, such as modern hospitals, clinics, schools, and college campuses designed to meet evolving needs.

Supportive Government Policies And Foreign Investment

Government initiatives like GST and Real Estate Regulatory Authority (RERA) make the real estate market more open and trustworthy. These changes help buyers and investors feel more confident. Foreign investors and large companies are also putting more money into Indian commercial real estate, which helps the sector grow steadily.

Green Incoming Supply Outpacing Non-Certified New Spaces Economic Growth And Growing Cities

Indias fast-growing economy and the movement of people to cities are major reasons why commercial real estate is growing. With the countrys economy growing at around six to seven percent every year, businesses are expanding, with an increase in the need for commercial spaces.

Indias Residential Real Estate Market¹⁶

Indias residential real estate market remained strong with around 300,000 homes sold. This steady demand was mainly due to high household incomes, better infrastructure and increasing demand for houses growing cities like Mumbai, Pune and Bengaluru. Even though elections briefly slowed down new project launches, developers responded by adding nearly 280,000 new homes. Mid-range housing (priced between INR 45 lakh and INR 1 crore) saw the highest demand, making up over 40% of all sales, especially from first-time buyers.

High-end homes (INR 1–2 crore) followed, with increased interest seen in cities like Noida, Pune and Chennai.

Luxury housing also saw a big boost, with sales rising about 75% compared to the previous year. Buyers included NRIs, wealthy individuals and the growing upper-middle class looking for modern and upscale homes. Cities like Delhi-NCR, Mumbai and Hyderabad excelled in luxury sales and developers responded by launching about 22,000 new luxury homes, a 25% jump from the previous year. At the same time, home loans continued to be in demand, with the Reserve Bank of India noting an 11% increase in disbursements. Larger home loans, especially those above INR 75 lakh, made up 30% of the total housing loans, showcasing that both buyer interest and financial investments are increasing steadily.

Outlook¹⁷

Indias housing market is expected to stay stable in coming years, with new home launches likely to remain high. The market may also benefit from the recent interest rate cut by the RBI, which could encourage more people to buy homes. As the gap between rent and loan payments becomes smaller, more buyers may see homeownership as a better option. Developers are also expected to continue launching new projects, backed by land purchases worth around $5.8 billion over the past two years.

More buyers are also looking at homes in the INR 1 to INR 2 crore range, especially in cities where bigger homes and better living spaces are in demand. This change is due to people having more disposable income and wanting more comfort. Even in areas that usually had only mid-range homes, interest in high-end properties is growing. This trend could also lead to more buyers taking bigger home loans to meet their needs. Overall, the housing market is expected to keep growing steadily, with a strong focus on mid-to-high-end homes.

Customised Family Homes And Townships Changing The Way People Live

Luxury homes are still expected to attract wealthy buyers like HNIs and NRIs. But the idea of luxury is changing. Instead of investing in large bungalows, people now prefer homes that fit their lifestyle and needs. . People now want large townships that include everything homes, offices, parks and retail spaces all in one place. These new townships are being designed to save time, improve quality of life and suit modern family setups.

Project Quality and Location Will Matter More For Price Growth

Property prices have steadily increased over the past few years, but in CY 2025, this rise may slow down. Projects that are in good areas, with smooth road or metro connectivity, nearby schools, hospitals, and good amenities, will likely continue to sell at better prices. But developers will need to manage the supply they add into the market, so prices dont flatten. To stand out, theyll also need to understand local buyer needs in different areas, instead of using a one-size-fits-all approach.

These smart strategies could help in maintaining property value and growth in a competitive market.

Rental Housing Is Changing And Becoming More Organised

Rental housing in India is going through a big shift. More investors and companies are entering this space and they are no longer just offering simple flats to rent. They are now looking to buy entire buildings or blocks and turn them into well-managed rental properties. This is especially noticeable in segments like student housing and senior citizen living, where people need special features and support. These homes are designed for comfort, safety and community living. Investors are putting money into these areas to meet the growing demand from people who dont want to buy a house right away but still want quality living spaces.

Green Buildings Becoming A Regular Choice For Homebuyers

In CY 2025, sustainability is becoming a key feature that both buyers and builders care about. As people become more aware of climate change and energy use, many now prefer homes that are good for the environment. In luxury housing, buyers are very aware and want features like solar panels, rainwater harvesting and energy-efficient systems. They also expect buildings to be certified as green. So, builders are now including these elements to attract high-end buyers. Things like better ventilation, waste management and water-saving systems are gaining acceptance among everyday buyers. This shows that green practices are slowly becoming a part of how homes are being built.

Company Overview

Capacite Infraprojects is a specialised construction company that provides Engineering, Procurement and Construction (EPC) services for both public and private sector clients. Established in 2012, the Company focuses solely on building construction, offering end-to-end services that include project design, execution, Mechanical, Electrical and Plumbing(MEP) works and overall project management. With operations spread across India, Capacite has worked with top real estate developers and government organisations to deliver quality-driven projects.

Renowned for its expertise in high-rise and super-high-rise construction, Capacite employs innovative technologies and sustainable practices to ensure quality, safety and environmental responsibility. The company is driven by a passion to turn clients visions into reality and is focused on consistently delivering excellence.

Over the years, Capacite has built a strong track record of completing more than 100 projects and working with over 70 satisfied clients. It has constructed over 70 million square feet of residential, commercial and institutional spaces across major Indian cities like Mumbai, Pune, Delhi, Varanasi, Bengaluru, Chennai and Hyderabad. Notably, it earned a Limca Book of Records entry for the fastest construction of a hospital. This recognition showcases the Companys ability to deliver complex projects within tight deadlines.

Capacites diverse portfolio spans across high-end residential buildings, office spaces, malls, hotels, hospitals, multi-level car parks, factories and data centres, reflecting its ability to adapt to the evolving needs of the construction industry.

Strengths

Exclusive Focus On Construction

Capacite Infraprojects concentrates solely on providing complete construction services for buildings and factories. This specialised approach has helped the Company build deep expertise, develop a skilled team and invest in advanced technologies. The result is stronger client relationships, operational excellence and improved financial performance, enabling the Company to qualify for major public sector projects and also preferred contractor for large private sector clients.

Established Track Record

The company has built a strong presence and reputation in the construction industry over the years. It has consistently delivered a wide range of successful projects across key Indian cities. Its experience in handling large-scale, complex structures gives it a clear competitive edge, especially when competing for large and prestigious contracts. Recognition for timely and quality execution further adds to its credibility and quality standards.

Marquee Client Base

Capacite works with both the public and private sectors, including several top developers and government agencies. The Companys client list includes many repeated customers, reflecting the trust placed in its execution capabilities. Partnering with financially stable and reputed clients ensures consistent project flow and contributes to overall financial stability.

Robust Execution Capabilities

Capacite leverages cutting-edge construction techniques, including innovative concrete solutions and versatile formwork systems to meet diverse construction needs. A dedicated team manpower oversees labour mobilisation, training and welfare. This execution underpins the companys ability to meet challenging project requirements and timelines.

Diverse Project Portfolio

Although the Company focuses solely on building construction, it has a diversified portfolio within the sector. It has executed projects across residential, commercial and institutional spaces. Over time, the Company has expanded its scope to include high-rises, gated communities, office spaces, malls, hospitals, data centres, hotels, car parks and factories. This diversity allows Capacite to cater to a wide array of client requirements without deviating from its core competency.

Clear Growth Trajectory

Capacite is on a steady growth trajectory, supported by increasing client demand, strong execution efficiency and a healthy pipeline of new projects. The Companys improving financial performance and proactive management strategy signal confidence in sustaining and accelerating this growth. With an emphasis on timely delivery and expanding capabilities, Capacite is well-positioned to scale new heights in the coming years.

Health And Safety

Capacite Infraprojects prioritises well-being and safety across all its project sites. Mandatory safety induction training, along with access to housing, food, transport and medical care, supports a secure and healthy work environment. This focus on safety is particularly critical in healthcare and factory construction, where Capacite has an active involvement.

Formwork

The Company owns and uses various types of system formwork, including automatic climbing system formwork, aluminium formwork, table formwork and composite panel formwork, which combines vertical and horizontal panel systems. These different types are used to meet the specific needs of different building projects. The use of modern technology in these formworks shows the Companys ability to take on advanced construction projects.

Financial overview

Under the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is required to disclose significant changes in key financial ratios. A significant change is defined as a variation of 25% or more compared to the previous financial year.

Key Ratios	FY 2024-25	FY 2023-24
Debtors Turnover (no. of days)	183 days	188 days
Inventory Turnover (no. of days)	42 days	148 days
Interest Coverage Ratio (in times)	5.60	4.63
Current Ratio (in times)	1.86	1.78
Debt Equity Ratio (in times)	0.25	0.22
EBITDA (in %)	19.49%	18.75
Net Profit Margin (in %)	8.26%	6.00
Return on Net Worth (in %)	10.67%	7.55

Operational Overview

Capacite Infraprojects specialises in constructing buildings and factories across major Indian metropolitan regions such as Mumbai (MMR), Delhi (NCR) and Bengaluru. The Company undertakes a wide range of projects including high-rise buildings, commercial complexes, gated communities, hospitals, data centres, car parks, and institutional buildings. It provides end-to-end construction services, including electrical, plumbing, finishing and interiors, leveraging modern methods to manage complex structures efficiently. The Company maintains a sharp focus on its core strength- building construction. This clarity, combined with strong execution capabilities and a skilled workforce, has positioned the Company as a trusted partner for both public and private sector clients.

Human Assets

Capacite Infraprojects is guided by an experienced promoter group and a senior management team that oversee critical functions like finance, operations and strategy planning. The leadership team includes seasoned professionals in construction, procurement, finance and investor relations, playing a pivotal role in driving the Companys performance and long-term growth.

At the core of the Companys success is its dedicated workforce, viewed as essential to project execution. Most workers are sourced through contractors, with the Company placing strong emphasis on training, safety and welfare. Regular training sessions are conducted on occupational health and safety, as well as process quality, to ensure operational excellence and error reduction.

In response to industry-wide labour shortages, Capacite improved its retention strategy by shifting to a 15-day wage payment cycle. Our project sites are sufficiently staffed, reflecting successful workforce mobilisation and planning. The Companys culture is performance-driven, centred on timely execution, quality delivery and client satisfaction. Through skilled workforce management and experienced leadership, Capacite aims to set new industry benchmarks and achieve sustained growth in the building construction sector.

Total workforce as of March, 2025.

Corporate Social Responsibility (CSR)

Capacite Infraprojects undertakes its CSR initiatives with a strong focus on education, healthcare, cultural heritage and the environment. In education, the Company supports children from poor families and those with disabilities by helping them get access to learning resources, better infrastructure and skill training. The Company works with NGOs and schools to give these children more opportunities and create a supportive learning environment. In healthcare, the Company aids economically backward particularly those battling with serious illnesses like cancer. By collaborating with hospitals and health groups, the Company offers financial assistance to the people who need medical care.

Capacite is also committed to supporting Indias rich cultural heritage. It The Company works with cultural groups to keep these art forms alive and promote them among communities. On the environmental front, the Company runs campaigns to reduce the use of plastic and encourages the use of cloth bags instead. By distributing re-usable bags and supporting local artisans who produce them, the Company promotes eco-conscious habits and community empowerment.

Risk Management

Risk	Description	Mitigation strategy
Labour Risk	It is hard to find enough trained workers. Labour keeps shifting for small pay hikes.	The Company trains its workers regularly, offers better welfare, pays within a 15 day cycle, provides safety and quality training.
Competition risk	High competition may reduce profits on projects.	The Company selects projects with fair margins and work with repeat clients who value quality.
Payment risk	Some clients may delay payments which may cause the Company to face financial issues.	The Company works with financially strong clients and avoid those dependent on unstable funding.
Time Risk	Commodity price fluctuation, Delays or poor work can increase project costs.	The Company gives process training, plans resources smartly and chooses contracts with price adjustment clauses.
Financial risk	Interest costs and high debt levels can be risky.	The Company keeps debt low, aiming to reduce it further and plans to sell non core assets to improve cash flow.

Internal Control System And Adequacy

Capacite Infraprojects has set up a strong internal control system to manage its operations effectively. Clear roles and responsibilities are defined for all senior positions, which helps ensure smooth functioning and accountability across the Company. These systems are designed based on the size and nature of the business and are regularly reviewed to keep them relevant and effective. The Audit Committee plays an important role in overseeing internal controls. It reviews the systems from time to time and suggests improvements wherever needed. The Company follows an annual internal audit plan that is approved by the Audit Committee. Regular checks are done to make sure business processes are running as expected and any issues are resolved quickly. These checks also help ensure the safety of assets and compliance with laws and policies.

Capacite follows an Expected Credit Loss (ECL) policy to manage the risk of unpaid dues. The policy is approved by the Audit Committee and helps the Company stay prepared for potential losses. To control costs and avoid delays, the Company provides safety and quality training to workers and uses its workforce efficiently. Strong cost control measures are also in place. The Company is very selective when choosing clients. It works with those who have strong finances and avoids those relying on uncertain funding. Most projects have cost escalation clauses to protect the Company from rising material prices. Efforts are also being made to recover old dues through legal means and settlements.

Cautionary Statement

The section concerning the MDA contains statements about future prospects that could be seen as forward-looking. These statements involve various risks and uncertainties, including those that may arise from global events like the COVID-19 pandemic, which can introduce unforeseen challenges. The data and information presented in the report are based on assumptions drawn from available internal and external sources. Since these assumptions can change over time, the estimates derived from them are also subject to change. Its important to recognise that these forward-looking statements represent the Companys current intentions, beliefs, or expectations as of their date of issuance. The Company is not obligated to update or revise these statements in light of new information, future events, or other factors.