Excel Realty N Infra Ltd Management Discussions

FORWARD-LOOKING STATEMENTS

The report contains forward-looking statements, identified by words like ‘plans, ‘expects, ‘will and so on. All statements that address expectations or projections about the future are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Companys actual results, performance or achievements could thus differ from those projected in any forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.

ECONOMIC OVERVIEW

Two sectors in India stand out as the primary engines of growth: real estate and infrastructure. The major reason for this is that the two components of a countrys growth are intricately interconnected, forming a symbiotic relationship that significantly influences urban development and economic advancement. By 2040, the real estate market will grow to Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019. 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.

Indias real estate sector is expected to expand to US$ 5.8 trillion by 2047, contributing 15.5% to the GDP from an existing share of 7.3%. In FY23, Indias residential property market witnessed with the value of home sales reaching an all-time high of Rs. 3.47 lakh crore {US$ 42 billion), marking a robust 48% year-on-year increase. The volume of sales also exhibited a strong growth trajectory, with a 36% rise to 379,095 units sold.

INDUSTRY OVERVIEW

Excel Realty N Infra Limited (Formerly known as Excel Infoways Limited) (hereby known as ‘Excel) has been continuously striving to achieve growth and success in operating in the multi business segments. It operates in 3 segments i.e. Infrastructure, BPO / IT enabled services and general trading segment.

In Indias top eight cities, housing prices rose 7% year-over-year due to strong housing demand supported by persistent purchaser demand and steady borrowing rates.

BPO Role in Indias Economic Growth has been tremendous, especially in the last few years, when the demand for outsourcing work to India has been significant among western companies. The role played by BPOs in boosting Indias economy shows that the IT and ITeS sector have been contributing largely to the economic growth of India.

SEGMENT-WISE PERFORMANCE

• Infrastructure Activity -

The Company is exploring various avenues to enhance the revenue generated by Infrastructure Sector. The Company has generated a revenue of Rs.25768.260 (‘000) in the Infrastructure segment this year and Rs. 12270.60 (‘000) revenue from the Infrastructure Sector in the previous year.

• IT/ BPO

The IT and BPO segment is engaged in the business of providing customer care services and handling the business relations of clients on their behalf by maintaining relation with their consumers and also providing them service by assisting them in managing their work flow and updating their records. We provide inbound and outbound services to our clients. The Company could not generate any revenue under this segment this year and previous year.

• General Trading

The Company is engaged in the business of general trading. The Company could not generate any revenue under this segment this year. The revenue generated under this segment in the previous year was Rs. 52,258.57 {‘000)

OUTLOOK

The prime motive of the Company has been profitable growth and to achieve the same, the Company has been fast re shaping its process aligning its people to the vision of creating long term shareholder value. The Management believes that there is significant potential for growth for the Company being multi segment Company. Your Company is recognized by clients for ability to bring in an integrated perspective and ability to bring in innovative ideas, and to draw learnings and apply insights from one company or sector to another and ability to provide end-to -end services. Our clients value our consistent excellence in execution and our ability to proactively incorporate relevant innovation. Despite challenging environment, the management of your Company is continuing its efforts to bring favorable results and hence looks in the intricacies of designing, developing and construction of the project with an eye to perfection.

DISCUSSION ON FINANCIAL PERFOMANE WITH RESPECTIVE TO OPERATIONAL PERFORMANCE

The Previous Financial Years Profit was Rs. 26,251.24 (‘000). The Company has, managed to get Profits for this Financial Year of Rs. 12,757.94 (‘000). Though the Revenue from Operations of the Company has decreased from Rs. 64,529.17 (‘000) in the previous Financial Year to Rs. 25,768.26 (‘000) in the current Financial Year, Other Incomes has also decreased in this Financial Year to Rs. 36,077.31 (‘000) compared to the previous year of Rs. 60,468.86 {‘000). However, we are hopeful that there will be a gradual improvement in business conditions.

During the year under review, the Companys expenses has reduced to Rs. 47,441.08 (‘000) as compared to the previous year of Rs. 98,740.14 {000).

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

OPPORTUNITIES AND THREATS

The Indian real estate industry has undergone significant changes in recent years, driven by factors such as the growth of the Indian economy, urbanization, and increased demand for housing and commercial spaces. The industry has also faced various challenges, such as regulatory issues, a lack of transparency, and a slowdown in demand in certain segments.

~ Formerly Known as txcel intoways Ltd.

OPPORTUNITIES

• Affordable Housing:

The affordable housing segment is a significant opportunity in the Indian real estate sector. The governments focus on providing "Housing for AN" by 2022 has created a huge demand for affordable housing. Developers who focus on this segment can benefit from government incentives and tax breaks.

• Commercial Real Estate:

The commercial real estate segment, including office spaces, shopping malls, and warehouses, offers significant growth opportunities in the Indian real estate sector. With the growth of e-commerce, there is an increasing demand for warehouses and logistics parks.

The Company firmly believes that there will be rise in demand and growth due to various implementations. The Company operates in multi segment business therefore the demand should remain strong in the medium to long term. The Company understands in order to remain competitive and to continue being a trusted partner to our customer we need to expand our scope of services and capabilities. The Company believes there will be strong growth and increase demand in the trading segments. The Company expects better results in this sector due increasing rising income and growth of service sector The Companys long term view on this Segment is positive.

The Company faced lot of economic challenges in Infrastructure sector. The Company is also engaged in IT/ BPO activity. In this segment the Company is engaged in the business of providing customer care services and handling the business relations of clients on their behalf by maintaining relation with their consumers.

THREATS

• Economic conditions

Excel operates in different segments and hence is exposed to challenges to different economic conditions, trade policies, local laws, political environment and also includes challenges like timely completion of projects and to maintain a smooth balance between returns and risk. In addition to this, there are risks associated to operating in different geographies in terms of terrain, sociopolitical and engineering factors.

• Land Acquisition:

Land acquisition is a major challenge for real estate development in India. The process is complicated, time consuming, and often leads to disputes between developers, landowners, and government authorities.

• Construction Delays:

Delays in project completion are a common problem in the Indian real estate industry. This can be due to a variety of factors, including delays in obtaining approvals, shortage of skilled labor, and supply chain disruptions.

• Attrition:

Excel is in an industry where attrition is one of the major areas of concern. One of the major challenge we face is high attrition. Our constant endeavor is to continue adding new values and services to our clients, stakeholders, etc and thereby contribute to the overall growth.

• Foreign currency risk

The nature of operations exposes the Company to multiple currencies, fluctuations in exchange rates could affect Companys performance. Prices get reviewed and revised in the event of significant currency movements. The exchange rates are volatile and subjected to economic conditions.

• Cost of people

The major risk is to retain existing talent and attract new talent. The need to strengthen and improve leadership pipeline is an important priority to keep up with the fast paced growth of the Company.

• Regulatory environment

The Company is exposed to risk attached to various statutes and regulations. The Company is mitigating these risks through regular review of legal compliance carried out through internal and external compliance audits. Our ability to manage, evolve and improve our operational, financial and internal controls across the organization and to integrate our widespread operations and derive benefits from our operations is key to our growth strategy and results of operations.

• Collection of receivables from our clients

There are usually no delays associated with the collection of receivables from our clients. Our operations involve significant working capital requirements and prompt collection of receivables affect favorably to our liquidity and results of operations. However, there can be no assurance that any such development would not adversely affect our business.

RISK AND CONCERN

Market Risk related to the uncertainty associated with unanticipated fluctuations in factors that commonly affect the entire financial market. It may not be specific to the business or the industry we operate in; however, there may be an impact on earnings. Various factors including market risk include geopolitical tensions, pandemic/endemic, natural disasters, inflationary pressure, economic risks, etc. The Company has a good business model with residential and annuity business. Residential business is directly exposed to market dynamics and risks whereas annuity business which brings in steady cash flows will not get impacted to the same extent of the residential business.

Land is the major ingredient for real estate business. The title related risks, risk of legal disputes and the related costs are major risks for the real estate business. Non-availability of land at appropriate locations at a reasonable price will lead to higher land costs. This will increase the overall cost of the project and will have an adverse impact on the Companys performance.

Execution depends on several factors like raw material availability and their prices, labour availability, regulatory approvals/ clearances, weather conditions etc. Execution is very crucial. We do a lot of meticulous planning, engage reputed contractors and have cross functional team meetings during the development of the project to ensure timely execution of the projects with good quality of development.

Risk management is an integral part of the Companys business process. With the help of experts in this field, risks are carefully mapped and a risk management framework is evolved. Pertinent policies and methods are set forth to mitigate such risks. The Company has taken several measures to beef up its security preparedness. In addition to the physical security measures, the Company to meet financial obligations and other obligations which may arise from any untoward incidents.

Company periodically assesses risks in the internal and external environment, along with the cost of rating risks and incorporates risk treatment plans in strategy, business and operational plans.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets the reliability of financial controls, and compliance with applicable laws and regulations.

The organization is well structured and the policy guidelines are well documented with pre-defined authority. The Company has also implemented suitable controls to ensure that all resources are utilized optimally, financial transactions are reported with accuracy and there is strict adherence to applicable laws and regulations.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company is dedicated and committed to provide a great workplace that is inclusive and equal for all in all aspects as employees and customers form the core of any and every business decision. The Company considers employees as the most valued asset who are at the core of the business. Human Capital is most important business driver. A strong people culture is the soul of the organization and biggest competitive advantage for a sustainable growth. The key pillars of the core philosophy are talent care and development, empowerment and decision making at all levels, innovation, agility and digital transformation.

The median remuneration for the financial year 2023-2024 was Rs. 3,18.380 {‘000)

As on 31 st March, 2024, the Company had 6 permanent employees.

CHANGE IN RETURN OR NETWORTH

During the year under review the Companys total net worth is Rs. 1,722,564.22 (‘000) as compared to Rs. 1,709,806.27 (‘000) in the previous financial year. The net worth of the company has increased by 0.75 %.

CAUTIONARY STATEMENT:

Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, expectations or predictions are "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, finished goods prices, stock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations.