Eldeco Housing & Industries Ltd Management Discussions

TICKET SIZE SPLIT COMPARISON OF SALES SHARE

(% Share in Total Sales)

SALES TREND

As per the Knight Frank Research Report, Indias residential market has experienced significant growth with annual sales volumes growing at a CAGR of 23% since 2020. In 2024 alone, 372,936 units were launched marking an 11-year high in annual new supply. Despite robust sales, development activity has grown faster since 2022, as developers boosted supply by launching new projects to capitalize on the growing demand.

INDIA MARKET SUMMARY

(In %)

23%

CAGR

HOUSE PRICE INDEX

The all-India House price index increased by 3.1% YoY in Q4FY25, maintaining the same growth as Q3FY25. On a sequential basis, house prices across India increased by 0.9% in Q4FY25, with major cities like Bengaluru, Jaipur, Kolkata, and Chennai seeing notable price gains during the quarter.

MOVEMENT OF HOUSE PRICE INDEX (RBI)

LUCKNOW - NORTH INDIAS NEXT BIG GROWTH HUB & REAL ESTATE HOTSPOT

Lucknow, the capital of Uttar Pradesh, is emerging as a major real estate hub in North India, driven by steady economic growth, supportive government policies, and ongoing infrastructure development. Key projects such as the Lucknow Metro expansion, the 104-kilometer Outer Ring Road, and the Agra-Lucknow Expressway have significantly improved connectivity, linking the city to key regions like NCR. This enhanced accessibility, along with the citys growing IT, manufacturing, and tourism sectors, has increased demand for both residential and commercial properties. Prominent areas like Gomti Nagar, Hazratganj, and the IT corridor are witnessing a rise in plotted developments, integrated townships, and commercial projects. As a result, property prices have appreciated by 25-50% over the past two years.

As per a report by PropEquity, residential sales across tier 2 cities declined by 8% YoY to 43,781 units during Jan-Mar25, while Lucknow registered a 25% increase in residential unit sold and a 48% rise in sales value to D 1,797 crore, the highest growth among tier 2 cities. With the RBIs 50 bps rate cut and further easing expected, affordability is expected to improve, further supporting the Lucknows real estate momentum.

TOTAL SALES (IN UNITS)

COMPANY OVERVIEW

Eldeco Housing and Industries Limited ("EHIL" or "the Company") is a prominent real estate developer in Uttar Pradesh since 1985. With a significant presence in the rapidly growing city of Lucknow, Eldeco operates in both the segments, the horizontal township format and vertical group housing, with a focus on middle income segment. The Company has been growing steadily for the past 40 years, with an expertise in construction, development, promotion and sale of townships, residential and developed plots. EHILs success is driven by its timely delivery of quality projects and exceptional customer service.

Furthermore, it integrates sustainability into its business plan by incorporating eco-friendly practices into a variety of projects, such as battery-operated E-Rickshaws for reduced carbon footprints, solar panels to increase energy efficiency and solar water heaters, ensuring unwavering commitment to both its customers and the environment. Over the years, Eldeco has become a brand leader in real estate development in Lucknow.

OPERATIONAL PERFORMANCE

During FY25, the Company delivered strong operational performance, marked by substantial growth in sales bookings and collections. To capitalize on rising demand and strengthen its development pipeline, the Company strategically acquired 50 acres of land during the year. EHIL also expanded its portfolio with the launch of its high-end luxury project Eldeco Trinity and a new wing within the Eldeco Latitude 27 project. These launches contributed to a 32% increase in realizations, reaching D 6,568 per sq. ft., which helped offset a dip in volumes. In FY25, the Company delivered 2.64 lakh sq. ft. and registered 294 residences, up from 172 in FY24, reflecting its improved execution capabilities while building a solid base for scalable future growth.

Total income for the year stood at D 143.7 crore against D 122.3 crore in FY24, a growth of 17.5% YoY. The Lucknow real estate market remains steady, with growing demand for premium properties, a trend that continues to support higher per sq. ft. realizations.

KEY OPERATIONAL HIGHLIGHTS OF FY25:

• Expanding Land Bank: During FY25, the Company acquired 50 acres of land in Lucknow to capitalize on the increasing demand for residential properties. This expansion supports future project development, enhancing growth prospects.

• New Project additions: During the year, the Company launched Eldeco Trinity and a new wing in the Latitude 27 project. Eldeco Hanging Gardens and Eldeco Skywalk launched in April 2025 received a positive response with initial bookings for both projects. Additionally, Eldeco Solano Gardens is currently in the pipeline.

• Construction: spends for the reporting year stood at D 156.0 crore.

• Area booked for FY25 stood at 5,13,849 sq. ft., booking in terms of value stood at D 337.5 crore, on the back of strong demand momentum in the U.P. market.

• The average realisation for FY25 stood at D 6,568 per sq. ft compared to D 4,968 per sq. ft. in FY24.

• Collections for FY25 grew by robust 105% YoY at D 253.9 crore against D 124.0 crore.

ON-GOING PROJECTS

EXISTING STRENGTHS AND FUTURE GROWTH

MARKET LEADERSHIP IN LUCKNOW

• Brand equity cultivated over four decades

• Rapid development and growth in Lucknow, leading to surge in demand for quality real estate

• Properties located in prime areas of Lucknow offering high quality construction and modern amenities

DEMONSTRATED EXECUTION CAPABILITY

• Robust experience in project execution

• Quality and timely delivery of projects

• Simultaneous handling of multiple large projects

• 67 projects completed till date

PRUDENT FINANCIAL MANAGEMENT

• Conservative capital structure providing ability to raise growth capital

• Ability to fund business operations by taking advances from customers

FINANCIAL HIGHLIGHTS CONSOLIDATED

• Total Income stood at D 143.7 crore in FY25 compared to D 122.3 crore in FY24

• The EBITDA was C 35.6 crore in FY25 compared to D 49.0 crore in FY24. The EBITDA margin stood at 24.8% in FY25 against 40.1% in FY24

• The PAT (profit after tax) stood at C 21.5 crore in FY25 compared to C 33.9 crore in FY24. The PAT margin was 15.0% in FY25

• The Board considered and recommended a final dividend for financial year ended March 31, 2025, of C 9/- per equity share of face value of C 2/- each.

DETAILS OF KEY CONSOLIDATED FINANCIAL RATIOS DURING FY25

HUMAN RESOURCES

Our employees are at the heart of everything we do. Their commitment, expertise, and ownership mindset drive our success and help us deliver lasting value.

We continue to invest in building their technical and leadership capabilities through focused training and upskilling programmes. These efforts ensure our people are equipped to meet evolving business needs while staying true to our values and vision. As on March 31, 2025, the Company had 68 employees on the payroll.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

EHIL is committed to taking an appropriate approach to the health and safety management of its human assets. The Company adopts rational procedures and has adequate safety measures for all its workers at the construction site, thereby reducing worksite injuries. The Company also works towards employee wellbeing while ensuring diversity, zero discrimination, and other attributes essential to a healthy and beneficial working environment. EHIL puts great emphasis on a fraud-free and corruption-free work culture. The Company has various policies in place such as the Code of Conduct, Policy on Prevention of Sexual Harassment at Workplace, and vigil mechanism that ensure overall welfare of all the employees. The Company aims for continuous improvement in EHS performance by designing end-to-end business processes and requirements systematically and integrating them with Enterprise Resource Planning (ERP) to achieve overall sustainability.

QUALITY

EHIL is committed to best-in-class quality control processes and systems to attain maximum customer satisfaction. The Company undertakes the highest quality and timely delivery in all its projects. It has a capable and skilled project management team of engineers, site managers, associated employees, and a robust IT platform. The Company uses benchmarked technology tools to augment quality in planning, assurance, control, and improvement and strives to build a quality system for delivering defect free products to its customers.

INTERNAL CONTROL

EHIL has an adequate system of internal controls in place, commensurate with the size and nature of its business.

Internal controls cover all fields across all financial and operating functions ranging from procurement of land to smooth execution of projects in time. The Company has also developed internal expertise to coordinate and monitor project development processes for various stages such as initiation, planning, designing, procurement/contracts, construction and finally closing out. It also ensures compliance across all corporate and project levels. EHILs easy-to-use, on- demand solution, helps efficiently develop, deploy, verify, and monitor the ongoing effectiveness of internal controls. The Internal Controls at the Company provide sound assurance in the upkeep of proper accounting controls, monitoring operations, protecting assets from unauthorized use or losses, compliances with regulations, and guaranteeing the reliability of financial reporting.

SOME SIGNIFICANT FEATURES OF THE INTERNAL CONTROL SYSTEMS ARE:

• Preparation of annual budgets for all operating and service functions and periodical review of the same.

• Regular internal audits and checks carried out by an internal audit team to ensure responsibilities are executed effectively and that the systems are adequate. The Audit Committee of the board reviews the adequacy and effectiveness of the internal control systems and suggests improvements for strengthening them.

• Periodic reviews of important audit findings, accuracy of internal controls, compliance with Accounting Standards and the reasoning for changes in accounting policies and practices (if any) Anti-fraud programme.