Embassy Developments Ltd Management Discussions

ECONOMIC REVIEW

The global economy recorded growth of 3.5% in CY2025, remaining resilient despite geopolitical tensions, changing trade dynamics, and macroeconomic uncertainty. Technology-driven investments, fiscal expenditure, and relatively stable global trade continued to support economic activity, although growth patterns differed across regions.

Amid persistent geopolitical tensions, trade fragmentation, and subdued consumer demand, India registered GDP growth of 7.7% in FY 2025-26, thereby, retained its position as the fourth-largest economy, and recorded the highest growth among Emerging Market and Developing Economies (EMDEs). Overall, EMDEs expanded by 4.5% in CY2026, outperforming the advanced economies.

The Indian economy was supported by strong growth in the manufacturing and services sectors, along with robust capital formation, resilient private consumption, and sustained public investment in infrastructure. Healthy corporate and banking balance sheets, stable inflation, and improving FDI inflows further reinforced macroeconomic resilience, creating a favourable environment for investment and real estate demand. Private Final Consumption Expenditure (PFCE) increased to 61.5% of GDP, reflecting a supportive macroeconomic environment characterised by low inflation, stable employment conditions, and a gradual improvement in real purchasing power. The industrial sector remained resilient, with manufacturing recording growth of 8.6% in FY 2025-26. The Indian construction market also continued to witness robust growth, supported by unprecedented government capital expenditure on infrastructure development and rapid urbanisation, which drove demand for residential and commercial spaces.

Renewed geopolitical tensions in the Middle East during CY2026 have, however, heightened concerns regarding energy security, commodity prices, inflation, and global supply chains, leading to a more uncertain operating environment. These developments have implications for the real estate sector, particularly in relation to financing costs, construction input prices, and investor sentiment. Although global growth is expected to moderate during CY2026 before improving in CY2027, easing inflation and a more stable interest rate environment are expected to support capital flows over the medium term. India is expected to maintain its growth momentum, with GDP growth for FY2026–27 projected at 6.6%. The outlook is supported by strong domestic demand, stable inflation, and prudent macroeconomic policies.

INDIAN REAL ESTATE INDUSTRY

Over the years, the Indian real estate sector has evolved into a key driver of urbanisation, infrastructure development, and capital formation. The sector comprises residential, commercial, retail, logistics, and industrial segments. It continues to be one of the largest contributors to the Indian economy by generating significant employment across the construction industry and its allied sectors. During the reporting year, the sector maintained strong growth momentum, supported by rapid urbanisation, rising disposable incomes, and increasing infrastructure development across major cities. MMR, Hyderabad, Bengaluru, Pune, and Delhi NCR emerged as the key markets driving new residential launches. The market is witnessing a notable shift towards premium and luxury housing, driven by investments from high-net-worth individuals and NRIs seeking exclusive residences with modern amenities.

The Indian real estate market is expected to maintain a positive growth trajectory. The market is projected to reach a revenue of USD 1264.00 Billion by 2034, growing at a compound annual growth rate of 10.08% from 2026-2034.1 This growth is expected to be driven by sustained demand across both residential and commercial segments, supportive government initiatives, and continued infrastructure expansion. Ongoing investments in transportation infrastructure, smart cities, and industrial corridor development are also likely to strengthen market dynamics and create new growth opportunities. Indias residential real estate market enters FY27 with a phase of measured caution, balanced by strong long-term structural fundamentals. In addition, luxury residential projects are gaining prominence as they cater to buyers seeking not only a home but also a comprehensive living experience. Developers are increasingly focusing on creating luxury spaces that offer exclusive amenities and personalised services to meet the preferences of discerning Indian clients. India luxury residential real estate market is expected to witness a CAGR of 6.12% during the forecast period FY 2026 - FY 2033, growing from USD 27.87 billion in FY 2024-25 to USD 44.82 billion in FY 2032-33.2 Rising investment in luxury homes and increasing interest towards luxury lifestyle is expected to boost India luxury residential real estate market in the upcoming years.

Bengalurus residential real estate market recorded strong supply-side expansion during 2025, with new launches reaching a historic high compared with 2020. The city continued to outperform other major residential markets in India. Housing demand remained robust, supported by continued migration for employment opportunities across the IT, biotechnology, and startup sectors. Leasing demand also remained well diversified, led by IT-ITeS, flex operators, and manufacturing and industrial occupiers. Bengaluru further strengthened its position as Indias leading Global Capability Centre (GCC) hub. The city recorded increase in housing sales the first half of 2026. The residential market also experienced a notable shift towards premium housing during 2025.

The Mumbai Metropolitan Region (MMR) continued to represent the largest residential real estate market among the top seven cities*. During 2025, the residential segment witnessed a phase of stabilisation and consolidation. Despite a decline in residential launches during the reporting year, demand remained healthy. The segment continues to drive proptech adoption in India, with West India supported by Mumbais commercial real estate hub. Going forward, commercial and industrial real estate are expected to experience faster proptech adoption as facility management, portfolio management, and enterprise resource planning tools gain broader acceptance among developers and asset managers.

The National Capital Region (NCR) continued to be one of the largest residential real estate markets among the top seven cities. Developers from across the country maintained their expansion focus in the region. The industrial and logistics segment emerged as a significant growth opportunity, supported by the development of logistics infrastructure, warehousing facilities, manufacturing investments, and e-commerce activity. Ongoing investments in industrial corridors, multimodal logistics networks, and supply chain modernisation continued to strengthen demand for Grade A industrial and warehousing facilities. The NCR office market also sustained healthy momentum during 2025, with increased new supply reflecting continued occupier demand.

Chennai has long been recognised as a city that combines economic opportunity with a measured pace of urban development. During 2025, the citys residential real estate market remained resilient and recorded sustained growth, supported by healthy end-user demand and stable market fundamentals. The residential market remained stable during the first half of 2026. Consumer preferences also continued to evolve, with demand increasingly shifting towards the mid and premium housing segments as homebuyers sought larger residences, enhanced amenities, and improved lifestyles. Chennais office market also maintained strong momentum during 2025, with net office absorption increasing, reflecting sustained occupier demand and improving market confidence. IT-ITeS companies continued to account for the largest share of office leasing activity.

REAL ESTATE INVESTMENT IN INDIA

Investments in the Indian real estate sector demonstrated resilience and continued structural growth despite evolving global financial conditions. Although investment activity moderated, sustained occupier demand across office and warehousing segments continued to support long-term capital deployment in the sector.

Alternative Investment Funds (AIFs) emerged as a significant source of institutional capital for the Indian real estate market. The number of SEBI-registered AIFs increased from 154 in 2015 to over 1,700 by December 2025, reflecting the growing institutionalisation of alternative capital in India. Cumulative AIF fundraising increased from USD 1.9 billion in 2015 to USD 75.4 billion by December 2025, while cumulative investments reached USD 71.7 billion during the same period. Real estate continued to be a key recipient of AIF capital, with residential projects accounting for nearly 47% of cumulative real estate-focused fund allocations between 2021 and 2025.6 Platform investments further strengthened their role in Indias real estate capital markets by enabling investors to deploy capital across multiple projects and cities through long-term partnerships with developers.

During periods of tighter liquidity conditions, investment activity moderated; however, institutional investors continued to focus on stabilised and income-generating assets across office, residential, and mixed-use developments. Despite increasing institutional participation, the availability of capital in India remained relatively lower compared with other Asia-Pacific markets, highlighting the need for deeper and more diversified sources of long-term capital for the sector.

Real Estate (Regulation and Development) Act, 2016 (RERA)7

The RERA), enacted in 2016, has played a pivotal role in enhancing transparency, accountability and efficiency across Indias real estate sector while safeguarding homebuyer interests. The regulatory framework mandates the registration of real estate projects and agents, timely disclosures, and the establishment of State Regulatory Authorities and Appellate Tribunals. Since its implementation, RERA has expanded its footprint across the country, with more than 1.61 lakh registered real estate projects, over 1.13 lakh registered real estate agents, and more than 1.57 lakh consumer grievances resolved across 35 States and Union Territories. The strengthening of the regulatory ecosystem has improved buyer confidence, promoted greater compliance and contributed to a more organised and transparent real estate market.

SWAMIH: A Policy Lifeline for Indias Housing Sector8

The Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund was launched by the Government of India in 2019 as a government-backed initiative to provide last-mile financing for stalled, RERA-registered affordable and mid-income housing projects. As of 2025, the SWAMIH Investment Fund has facilitated the completion of over 58,596 homes under stalled affordable and mid-income housing projects and is expected to deliver more than one lakh homes, benefiting over 2.38 lakh people across the country. The revival of these projects has generated more than 30,000 jobs and stimulated demand across the construction ecosystem, reaffirming SWAMIHs role in restoring confidence and liquidity in Indias residential real estate sector. The Fund had also fully committed its investible corpus prior to the end of its investment period, reinforcing its significant role in reviving stalled housing projects and strengthening confidence in the Indian real estate sector.

Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0)9

Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0) was launched by the Government of India in 2024 to address the housing requirements of Economically Weaker Sections (EWS), Lower Income Groups (LIG) and Middle Income Groups (MIG) through support for house construction, purchase and rental housing. As of 2025, the Government had approved construction of more than 3.5 lakh houses under PMAY-U 2.0, with continued focus on inclusive urban development, housing accessibility and improvement of urban living standards across the country. The scheme continues to play a significant role in supporting affordable housing demand and strengthening the growth of the residential real estate sector in India.

COMPANY OVERVIEW

Embassy Developments Limited ("EDL") is among Indias leading real estate development companies, with a diversified presence across residential, commercial developments. Following the approval of the merger between NAM Estates Private Limited and Equinox India Developments Limited by the Honble National Company Law Appellate Tribunal (NCLAT) in January 2025, the merged entity was rebranded as Embassy Developments Limited, marking a significant strategic transformation for the Company. The Embassy Group, led by the Virwani family, became the promoter group of the Company with a controlling stake of 42.66%, strengthening EDLs institutional scale, execution capabilities and market positioning across India.

The Company has a strong development footprint across key real estate markets including Bengaluru, Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Chennai, with an expanding portfolio spanning premium residential, luxury housing and commercial developments. During FY 2025-26, EDL strengthened its growth pipeline through multiple residential and commercial project launches, while also expanding its development management portfolio across high-value urban markets in FY 2027. Key operational and business highlights for FY 2025-26 are presented separately in the KPI section. The Company also maintained a strong forward launch pipeline to support future growth momentum. As of March 31, 2026, EDL had an upcoming pipeline of 11 projects with an estimated cumulative GDV of approximately ?19,400 crores across residential and commercial segments. Management has highlighted continued focus on premium housing, large-scale integrated developments and institutional-grade commercial assets, while selectively expanding through development management agreements, JD agreements and strategic land acquisitions across high-growth urban markets.

• Flagship Development Platform of Embassy Group

Following the successful merger with NAM Estates Private Limited, Embassy Developments Limited has emerged as the flagship listed real estate development platform of the Embassy Group. Backed by the leadership of Mr. Aditya Virwani, Managing Director & Promoter, the Company benefits from Embassy Groups institutional scale, operational expertise and established market reputation across Indias real estate sector.

• Brand Integration with Expanding Market Presence

During FY 2025-26, the Embassy Group undertook a strategic brand integration and rebranding exercise, reinforcing EDLs positioning as a premium developer. Its entry into the Mumbai market, coupled with successful residential launches, enhanced brand visibility and customer engagement across key urban markets.

• High-Quality Development Pipeline

EDL has built a diversified pipeline across Bengaluru, MMR, NCR and Chennai, underpinned by strategically located residential and commercial assets. During FY 2025-26, the Company launched projects with an estimated GDV of approximately ?16,300 crores and maintained an upcoming pipeline of 11 projects with an estimated GDV of around ?19,400 crores, providing strong medium-term growth visibility in FY 2027.

• Execution Capability and Delivery Track Record

The Company demonstrated strong execution capabilities through disciplined project development and delivery. During FY 2025-26, EDL successfully delivered multiple legacy residential projects across MMR, NCR and Visakhapatnam, restoring customer confidence and strengthening operational credibility.

• Institutional Capital Support and Financial Discipline

EDL maintained a prudent financial management supported by institutional capital partnerships. During FY 2025-26, the Company secured approximately ?1,370 crores of growth capital from Kotak Real Estate Fund to support upcoming launches and business development initiatives, strengthening its financial flexibility and expansion capabilities.

• Record Sales Performance:

EDL achieved its highest-ever quarterly pre-sales in Q4 FY2026, with annual pre-sales rising 128% year-on-year to ?4,631 crores. The strong performance reflects robust demand for its premium residential offerings, disciplined sales execution and well-positioned product portfolio.

Consolidated Profit & Loss Statement (Extract)

Consolidated Balance Sheet (Extract) – Assets

Consolidated Balance Sheet (Extract) – Equity and Liabilities

Cash & Bank Balances, Debt & Equity

Outlook

While FY 2025-26 marked a transformational year for the Company, it continues to focus on expanding its project portfolio in the coming years. For FY 2026-27, the Company has a presales target of INR 6,000 crores from its own projects, reflecting a year-on-year growth of 30% and 2000 cr from DM Projects. The launch pipeline, along with sustained demand for Embassy Citadel and the Bangalore portfolio, is expected to support the Companys growth in FY 2026-27.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, explanation to significant changes (25% or more from FY 2024-25 to FY 2025-26) in the key financial ratios applicable to the Company are as under:

Notes

1) Debtors Turnover Ratio are not meaningful for the Company due to the nature of its business. The Company is engaged in real estate development, where revenue recognition, customer collections, and supplier payments are project-based and linked to construction milestones rather than recurring credit sales or purchases. Accordingly, these ratios do not provide meaningful information regarding the Companys operational performance and have therefore not been presented.

2) The change in ratio primarily on account of an increase in project inventory arising from ongoing development activities, whereas revenue recognition is linked to the stage of completion and timing of project handovers.

3) The change in ratio is attributable to decrease in loans and loss during the year ended March 31, 2026.

4) The change in ratio is primarily attributable to decrease in loans and increase in equity share capital.

5) The change in ratio is due to decrease in turnover during the year ended March 31, 2026.

6) The change in ratio is due to loss during the year ended March 31, 2026.

Projects to be launched in FY 2027

OC Received Projects

Ongoing Projects

HUMAN RESOURCES

The Company strengthened its human capital capabilities through a people-centric approach focused on leadership development, operational excellence and a performance-driven culture. Following the successful integration with the Embassy Group during FY 2025-26, the Company strategically aligned its organisational capabilities, talent integration and operational processes to support its expanding residential and commercial real estate platform across key urban markets. The Company focused on driving employee engagement, interdepartmental collaboration and execution excellence to support sustainable long-term growth. The Company remains committed to building a high-performing workforce through structured recruitment, capability enhancement and professional development initiatives. Key focus areas during the year included strengthening project execution teams, sales and marketing functions, customer engagement capabilities and development expertise across strategic markets such as Bengaluru, MMR and NCR. The Company also foster a culture of accountability, innovation and operational discipline aligned with its long-term growth strategy and evolving business requirements.

761

Total employees FY 2025-26

RISK MANAGEMENT

The Company operates in a dynamic real estate environment and maintains a disciplined approach towards risk management through prudent financial management, calibrated project launches and diversified market presence across key urban markets. The Company remains focused on maintaining a balanced capital structure, operational discipline and liquidity management to support long-term growth and execution capabilities. During FY 2025-26, the Company maintained a net debt to equity ratio of approximately 0.3x with net institutional debt of around ?3,000 crores, reflecting prudent financial management and a controlled leverage profile. The management focused on disciplined capital allocation, phased project execution, institutional funding support and expansion across high-demand residential and commercial markets to mitigate business and operational risks.

INTERNAL CONTROLS AND THEIR ADEQUACY

The Company has implemented an adequate and effective internal control framework commensurate with the size and nature of its business operations. The internal control systems are designed to safeguard assets, prevent unauthorised transactions and ensure that all financial and operational transactions are properly authorised, recorded and reported. These controls are supported through internal audits, management reviews and well-defined policies and procedures to ensure reliability of financial reporting and accountability across operations. The overall effectiveness of the internal financial and audit control mechanisms is periodically reviewed and monitored by the Audit Committee of the Board of Directors.

CAUTIONARY STATEMENT

Statements in this report on Management Discussions and Analysis describing the Companys objectives, estimates and expectations may be forward looking statements based on certain assumptions and expectations of future events. Actual results might differ substantially or materially from those expressed or implied. The Company here means the consolidated entity consisting of all its subsidiaries. Similarly, Companys land bank and Companys project means the consolidated land bank and project of the Company as consolidated entity along with all its subsidiaries. The Company assumes no responsibility nor is under any obligation to publicly amend, modify or revise any forward-looking statements based on any subsequent developments, information or events.