IITL Projects Ltd Management Discussions

GLOBAL ECONOMY:

The global economy continued to demonstrate resilience during 2025 despite persistent geopolitical tensions, evolving trade policies, financial market volatility and supply chain realignments. According to the International Monetary Fund (IMF), global growth is projected to remain stable over the medium term, supported by easing inflation and improving economic activity in several regions. Inflation moderated across most major economies, enabling several central banks to commence or continue monetary policy easing, although the pace remained cautious amid lingering inflationary pressures, trade-related uncertainties and evolving global economic conditions. While economic activity improved across several regions, growth remained uneven between advanced and emerging economies, reflecting varying domestic demand conditions, policy responses and external challenges.

Emerging market and developing economies benefited from strong domestic consumption, infrastructure investments and favourable demographic trends. Escalating geopolitical tensions in West Asia strengthened the US dollar due to increased safe-haven demand, resulting in tighter financial conditions for several emerging market economies. Growth across advanced economies remained moderate, while geopolitical developments, commodity price volatility, trade barriers and ongoing shifts in global supply chains posed downside risks to global economic activity. Nevertheless, easing inflation, steady services sector activity, gradual improvements in global demand and continued technological advancements are expected to support medium- term economic growth. However, geopolitical developments, trade-related uncertainties and financial market volatility are expected to continue influencing the pace of global economic recovery.

India remained one of the fastest-growing major economies, driven by strong domestic demand, sustained public capital expenditure, robust investment activity and a well-performing services sector. Policy reforms, infrastructure development, digitalisation initiatives and an expanding digital ecosystem strengthened the countrys growth prospects, while the Reserve Bank of India maintained a balanced monetary policy approach to support economic stability. Despite external challenges, Indias strong macroeconomic fundamentals, favourable demographics and ongoing structural reforms are expected to support sustainable long-term growth.

The Indian economy maintained strong growth momentum during FY 2025-26, supported by robust domestic demand, sustained public capital expenditure and a strong services sector. Manufacturing activity remained steady, aided by infrastructure development, government initiatives to promote domestic production and increasing adoption of digital technologies. Despite external challenges arising from geopolitical developments, evolving global trade policies and fluctuations in commodity prices, Indias macroeconomic fundamentals remained strong, supported by a healthy financial system, continued structural reforms and stable investment activity.

The Governments continued focus on infrastructure development, urbanisation, manufacturing, digitalisation and ease of doing business strengthened the countrys growth prospects. The Reserve Bank of Indias balanced monetary policy approach and improving liquidity conditions also supported credit availability and investment activity across various sectors of the economy. Continued moderation in inflation further contributed to credit growth and a favourable investment environment. Increased public investment in infrastructure and connectivity, coupled with improving business confidence and financial inclusion, supported economic activity and reinforced Indias position as an attractive investment destination.

Looking ahead, Indias economic outlook remains favourable, supported by resilient domestic demand, ongoing policy reforms and continued investments in infrastructure and technology. While external uncertainties may persist, Indias strong economic fundamentals, favourable demographics and continued focus on sustainable development are expected to support long-term economic growth.

The Indian real estate industry remained one of the key contributors to the countrys economic growth and employment generation during FY 2025-26. The sector witnessed sustained momentum across residential, commercial, retail and industrial segments, supported by favourable demographics, rising urbanisation, improving infrastructure, regulatory reforms and a stable macroeconomic environment. Continued Government focus on infrastructure development, affordable housing, urban transformation and regulatory reforms such as the Real Estate (Regulation and Development) Act (RERA), along with improved connectivity across key markets, further reinforced the industrys long-term growth prospects.

However, the sector continued to face certain headwinds during the year. Inflationary pressures and elevated construction input costs, including steel, cement and labour, impacted project costs and margins. Additionally, global geopolitical uncertainties, evolving regulatory requirements and project approval timelines continued to influence investment decisions and project execution across the industry. Demand across the residential real estate market remained mixed during the year, with the affordable housing segment witnessing relatively slower momentum due to affordability concerns and elevated property prices, while the premium housing segment witnessed healthy demand.

The residential real estate segment remained the primary growth driver, supported by strong end-user demand, increasing preference for home ownership, rising disposable incomes and growing demand for premium housing. Government initiatives promoting affordable housing continued to support housing demand across various income segments. At the same time, improving connectivity through metro rail projects, expressways and other infrastructure initiatives helped unlock the growth potential of peripheral locations and emerging urban centres. Tier II and Tier III cities also witnessed increasing real estate activity, driven by expanding employment opportunities, improving social infrastructure and rising purchasing power.

The commercial real estate segment maintained steady momentum, supported by healthy office leasing activity, expansion of Global Capability Centres (GCCs) and sustained demand from technology, financial services and other knowledge- based industries. The organised retail real estate segment continued to evolve with increasing emphasis on experiential retail, omnichannel strategies and technology-enabled customer engagement. Industrial and warehousing assets also benefited from growth in manufacturing, logistics and e-commerce, further diversifying the sectors growth drivers.

Institutional investment continued to demonstrate confidence in the Indian real estate market, supported by regulatory reforms, greater transparency and the increasing participation of domestic and global investors. Sustainability also remained a key area of focus, with developers increasingly adopting green building practices, energy-efficient technologies and environmentally responsible construction methods to meet evolving regulatory requirements and stakeholder expectations. However, investors remained selective, with capital deployment largely focused on high-quality projects developed by established and financially strong developers.

Looking ahead, the Indian real estate industry is expected to benefit from continued infrastructure investments, supportive Government policies, increasing urbanisation, favourable demographic trends and growing adoption of technology. While global economic uncertainties and evolving trade dynamics may pose short-term challenges, the sectors strong fundamentals, improving transparency and growing institutional participation are expected to support its long-term growth trajectory.

The Company is engaged in the real estate business.

During the Financial Year 2025-26, the Company evaluated and explored opportunities for growth and diversification in the real estate sector and other businesses allied thereto. The Company had entered into Channel Partner arrangements with few real estate entities for their residential projects pursuant to Memorandum of Understanding(s) executed with the respective parties. Under these arrangements, the Company had placed security deposits and was to undertake the booking and sale of residential units and earn brokerage/commission in accordance with the terms of the respective Memorandum of Understanding(s).

The Company is exploring business opportunities in brokerage services, construction consultancy and project management services, subject to obtaining the necessary statutory and regulatory approvals. The proposed initiatives are expected to provide opportunities for diversification and development of additional business avenues for the Company.

RISKS AND CONCERNS:

The Company recognises that an effective risk management framework is essential for achieving its strategic objectives and safeguarding stakeholder value. The Company has adopted a Risk Management Policy to identify, assess, monitor and mitigate risks that may affect its business operations and overall performance.

Although the Company did not undertake any operational business activities during FY 2025-26, it continues to monitor developments in the real estate sector and the broader economic environment. The real estate industry remains exposed to various risks, including changes in economic conditions, interest rates, regulatory and policy developments, fluctuations in input costs, evolving customer preferences and competitive market dynamics, all of which may influence business opportunities and future growth. The Company also continues to monitor risks relating to project approvals, execution timelines, changes in development regulations and other statutory compliance requirements inherent to the real estate sector.

The Company also remains exposed to risks arising from changes in the regulatory framework, including laws and policies relating to the real estate sector. The Company will continue to strengthen its risk management framework to effectively identify, assess, monitor and mitigate emerging business and operational risks.

As the Company evaluates opportunities for diversification into new business activities, the associated regulatory, market, execution and commercial risks will also be assessed before undertaking any such activity.

The total income of the Company for the financial year ended March 31, 2026 is Rs. 180.81 lakhs as compared to Rs. 235.00 lakhs in the previous year. The decrease in total income is primarily attributable to the absence of operational revenue during the current financial year.

A system of internal control is in place to ensure proper checks and balances in the operations of the Company and to safeguard its assets and interests. Roles and responsibilities are clearly defined at various levels of operations. An independent internal audit firm has been engaged to conduct periodic internal audits and submit its reports to the Management. All audit observations are discussed by the Management with the Auditors for follow-up action and for improvement in the process. The Audit Committee and the Board regularly review the same.

Adequate care has been taken to ensure due adherence to the Internal Financial Controls over Financial Reporting under Section 143(3) of the Companies Act, 2013.

The Company considers its human resources to be key drivers of its growth. The Company has a performance-based appraisal system and continues to promote a professional and performance-oriented work environment.

The global economy is expected to remain resilient despite ongoing geopolitical developments, evolving trade policies and financial market uncertainties. While external challenges may continue to influence the pace of global economic growth, Indias strong macroeconomic fundamentals, continued infrastructure development, policy reforms and favourable demographic profile are expected to support sustained economic growth over the medium to long term.

The Indian real estate sector is expected to benefit from increasing urbanisation, improving connectivity, favourable demographics, supportive Government initiatives and growing institutional participation. Investments in infrastructure, regulatory reforms, sustainability initiatives and digital transformation are expected to further strengthen the sectors long-term growth prospects.

Overall, the long-term outlook for the Indian real estate sector remains positive, supported by favourable economic fundamentals, policy support, infrastructure-led development and rising urbanisation.

The statements made in Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates and others may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors. Several factors, including changes in economic conditions, demand and supply, government policies and regulations, taxation laws, market conditions, competition, availability of resources, natural calamities and other factors beyond the Companys control, could cause actual results to differ materially from those anticipated. The Company and the Management shall not be held liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein.