Citadel Realty & Developers Ltd Management Discussions

The Management of the Company is pleased to present this report covering the activities of the Company during the year ended on March 31, 2025.

The global economy in FY 2024-25 is projected to grow at 3.3%, with advanced economies stabilizing and emerging markets showing mixed trends. Inflation has moderated due to tighter monetary policies, though services inflation remains sticky. Geopolitical tensions? especially in Ukraine, the Middle East, and the Red Sea?continue to disrupt trade and energy flows. Indias economy remains resilient, with estimated GDP growth of 6.4%, driven by strong private consumption, steady investment, and robust services exports. However, fresh tariffs imposed by President Trump?rising up to 50% on select Indian goods?have strained US-India trade ties. Sectors like gems, textiles, and pharmaceuticals face pressure, while semiconductor tariffs threaten Indias auto exports and supply chains1*2. Despite these headwinds, Indias diversified trade and accommodative monetary stance help cushion the broader economic impact.

Indias real estate market continued its strong momentum in FY 2024-25, attracting record investments of nearly $7 billion, with residential sales surging 77% since FY 20193. The sector is projected to reach a market size of $1.184 trillion by 2030, contributing 13% to Indias GDP4. Luxury housing led the charge, while affordable housing saw mixed results amid rising land costs and shifting developer focus5 The REIT market crossed ?1 lakh crore in market cap, reflecting growing investor confidence and liquidity6

Government initiatives?including ?10 lakh crore allocated under PMAY-U, stamp duty rationalization, and 100% FDI in township projects?have bolstered infrastructure and housing development. The introduction of Small and Medium REITs (SM REITs) and digitization of land records further enhanced transparency and ease of doing business. With rising demand, evolving consumer preferences, and sustainability gaining traction, both residential and commercial segments are poised for continued growth.

The real estate industry maintains a moderate uptrend, buoyed by rising urban demand and renewed consumer sentiment. However, challenges like interest rate pressures, regulatory complexities, and tight liquidity conditions continue to temper growth prospects.

3. Financial Performance Overview - FY 202425 vs. FY 202324

• Sales / Total Income: Rs. 3.54 Cr (+11.7%) compared to Rs. 3.17 Cr

• PBDT: Rs. 1.57 Cr, up 3% over Rs. 1.53 Cr

• Net Profit: Rs. 1.17 Cr (+1.7%) compared to Rs. 1.15 Cr.

• Basic EPS: Rs. 1.47 vs. Rs. 1.45

Sales growth outpaced modest net profit gains, indicating margin pressures from elevated financing or operational costs.

The Company operates in single segment of Real Estate business.

• High interest costs continue to strain profitability.

• Leverage levels, while declining, remain material.

• Economic slowdown or funding pressures could affect project delivery and sales.

Opportunities: Tapping affordable housing demand, micro-market developments, and strategic tie-ups.

Threats: Volatile macroeconomic conditions, rising input costs, and regulatory delays.

The company maintains an effective internal control framework commensurate with its size of operation and it is regularly audited, ensuring credible reporting and operational integrity.

Highlights:

• Profitability and asset returns declined slightly, though still healthy.

• Leverage reduced significantly, improving financial resilience..

• Negative operating cash flow indicates working capital pressure, though investments suggest expansion.

The Company at its Board Meeting held on July 14, 2025 declared an interim dividend of Rs. 0.50 per equity shares @ 5%. The dividend was paid on or before August 4, 2025 to all the shareholders as on the record date of July 18, 2025.

With the centralized human resources department at Group Level being the custodian of all people related processes, it becomes the critical success factor in organizational success. The HR works with an objective of aligning the aspirational needs of the people with the organizational objectives of sustained growth, market leadership and cost competitiveness.

We strongly believe in fostering a culture of trust and mutual respect in all our employees and ensuring that they understand and follow our values and principles. We have been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all areas and efficient utilization of our resources for sustainable and profitable growth.

Management remains committed to optimizing capital efficiency, reducing leverage, and improving operational margins. The emphasis will be on timely project execution, cost control, and leveraging affordable housing demand amidst cautious macro conditions.

The guidelines / accounting standards laid down by the Institute of Chartered Accountants of India (ICAI) and prescribed under section 133 of the Companies Act, 2013, have been followed in preparation of the financial statements of the Company.

Statements in this report on Management Discussion and Analysis may be forward looking statements within the meaning of applicable laws or regulations. These statements are based on certain assumptions and reasonable expectation of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in government regulations, tax regimes, economic developments within India and other incidental factors. The Company assumes no responsibility in respect of the forward-looking statements herein, which may undergo changes in future on the basis of subsequent development.

References:

1. https://www.msn.com/en-in/autos/news/donald-trump-looks-to-ramp-up-tariffs-on-semiconductors-will-it-impact-the-indian-auto- sector/ar-AA1K10w7

2. https://www.cnbc.com/2025/08/06/how-will-trumps-50percent-tariffs-on-india-impact-its-economv.html

3. https://www.grantthomton.in/globalassets/1.-member-firms/india/assets/pdfs/realtv-bvtes/realtv bytes may 2025.pdf

4. https://altois.com/blog/in-depth-report-india-real-estate-market-trends-2025-2026/

5. https://indianexpress.com/article/business/affordable-housing-shrinks-luxury-booms-prices-surge-snapshot-indias-real-estate- market-five-charts-10188232/

6. https://www.news18.com/business/indias-reit-market-hits-milestone-by-crossing-rs-1-lakh-crore-in-market-cap-ws-l-9502379.html