kbc global ltd Management discussions


Global Economic Outlook

Global growth is projected at 6% in 2021 moderating to 4.4% in 2022. The projections for 2021 and 2022 are stronger than in the October 2020 WEO. The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility. High uncertainty surround this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine powered normalization, and the evolution of financial conditions.

The Global Economy is projected to grow by 6.0 percent in 2021 and 4.9 percent in 2022. The 2021 global forecast is unchanged from the April 2021 WEO, but with offsetting revisions. prospectus for emerging market and developing economies have been marked down for 2021, especially for emerging Asia. By contrast, the forecast for advanced economies is revised up. these revisions reflect pandemic developments and changes in policy support. The 0.5 percentage point upgrade for 2022 derives largely from the forecast upgrade for advanced economies, particularly the United States, reflecting the anticipated legislation of additional fiscal support in the second half of 2021 and improved health metrics more broadly across the group.

Global Growth is expected to moderate from 5.9 in 2021to 4.4 percent in 2022 half a percentage point lower for 2022 than in the October World economic outlook (WEO), largely reflecting forecast markdowns in the two largest economies. A revised assumptions removing the Build Black Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage-points revision for the United States. In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and protracted financial stress among property developers have induced a 0.8 percentage points downgrade. Global growth is expected to slow to 3.8 percent in 2023.

The global real estate market is expected to grow from $3386.11 billion in 2021 to $3741.06 billion in 2022 at a compound annual growth rate (CAGR) of 10.5%. The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $5388.87 billion in 2026 at a CAGR of 9.6%.

The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest. Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January. Beyond 2023, global growth is forecast to decline to about 3.3 percent over the medium term. War-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies—1.8 and 2.8 percentage points higher than projected last January. Multilateral efforts to respond to the humanitarian crisis, prevent further economic fragmentation, maintain global liquidity, manage debt distress, tackle climate change, and end the pandemic are essential.

India Economic

Indias economy is expected to grow by 8.2% in the current fiscal year 2022-2023, sharply slower than the international Monetary funds earlier forecast of 9% as the impact of Russias invention of Ukrain weighs heavily on prices and disruption of supply chains. In its latest World economic Outlook (WEO) report, the IMF forecast Indias economy to grow by 6.9% in 202324. The latest GDP growth forecast for India is still higher than the Reserve bank of Indias (RBI) estimates of 7.2% for 202223. the central bank had earlier lowered its growth estimate from 7.8%, citing the impact of the war in Ukrain and breakdown of supply chains. The finance Ministry had earlier estimated the economy to grow in the 8%-8.5% range in 2022-23.

As such, external positions are generally expected to deteriorate particularly for net oil importers. Notable downgrades to the 2022 forecast include Japan (0.9%) and India (0.8%) reflecting in part weaker domestic demand as higher oil prices are expected to weigh on private consumption and investment and a drag from lower net exports, according to the WEO.

India however, will retain, its tag as the fastest growing major global economy but it faces severe headwinds.

Real Estate Sector Industry

The global real estate market is expected to grow from $3386.11 billion in 2021 to $3741.06 billion in 2022 at a compound annual growth rate (CAGR) of 10.5%. The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $5388.87 billion in 2026 at a CAGR of 9.6%.

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.

Market Size

Strong and positive momentums are expected to continue prevailing in Indian real estate in FY 23, backed by the solid structural foundation, gain in demand, and lowered home loan rates. By all means, FY 23 will be the fiscal year the industry has been hoping for long. The upswing in the market will also stem from a favorable economic outlook. Most of the rating agencies have estimated the growth of India in the comfortable range of 8-9%. The surge in commercial activities alongside a rise in the job market and income levels will naturally translate into increased housing demand.

In FY 23, the growth juggernaut will continue. Interestingly real estate in Tier 2 and 3 markets will also climb fast. Sustained infrastructure investments, increased connectivity, and better job opportunities will be fuelling real estate in smaller cities and towns in India. Already metro and suburban transit systems are taking shape in cities such as Lucknow, Kanpur, Agra, Patna, Cochin, etc, which will boost real estate demand. Under UDAN new airports are built, which will foster regional economic growth and help the realty sector considerably.

Real estate markets across India have shown resilience and succeeded in maintaining their position in exceptional years hurt by pandemics and blockades. While the housing sector showed a strong recovery throughout, the commercial real estate showed more stability in late 2021. The residential segment achieved unprecedented growth, with sales up 51 percent year-on-year, reaching 232,903 units among the top eight cities in the country.

Knight Frank India reported that new homes launched in 2021 also increased 58 percent to 232,382 units. It was mixed for the commercial office segment. Although the rent volume was recorded at 38.1 million, it remains at the same level as in 2020, clearly showing the market potential in terms of leasing.

Owing to the pent up ready inventory, the real estate prices are expected to rise gradually. The potential homebuyers who were waiting for the pandemic to get over are keen on investing in the real estate sector and considering the prices are still reasonable with developers are offering great discounts to serious buyers. Moreover, the continued push of the Indian government on the affordable real estate sector is driving the demand further.

Naturally, this demand will aid in solid sales for both the real estate sector across India in 2022-23.

If the latest data compiled by the real estate consulting firm Cushman and Wakefield is referred to, the net office absorption is expected to rebound strongly, at 30-35 percent, and will reach up to 29-31 million sq ft (MSF) by the end of 2022. Owing to the resumption of office activities, the fresh supply could reach 45-46 MSF in 2022 alone. These are very positive signs of a recovering and resurgent real estate sector across India.

The Union Budget 2022 - 2023 announced the allocation of Rs. 48,000 crores for the Pradhan Mantri Awas Yojana (PMAY), which is 75% higher than the Rs. 27,500 crore budget allocation made in the previous financial year. Around 80 lakh homes are expected to be completed by 2023.

While market recovery remains on track, it will not be a straight line across the asset classes, as each finds it is next to normal. "The office sector is likely to clock a 3035% y-o-y growth in net absorption levels in 2022 but will remain much below the highs of 2019. The residential segment is expected to reach pre-covid quarterly sales volumes in 2022 and given the strong momentum may also match the predemonetisation quarterly sales in the latter half of 2022,".


Every year, the announcement of the Union Budget gives rise to a lot of discussions on media. Finance Minister (FM) Nirmala Sitharaman presented the Union Budget 2022-23 to Parliament on Tuesday 1st, Feb 2022. It is the 10th Budget under Narendra Modi Ministry and the 4th Budget presented by FM. Also, it is the second Digital Budget that has been declared after the Pandemic. The Union Budget 2022-23 focuses heavily on digitization, urban development, and sustainability.

Rs 48,000 crore is allocated to the Pradhan Mantri Awas Yojna (PMAY). Placing focus on bringing transparency in the realty sector as well as affordable housing for everyone will play a crucial role in providing a much-needed boost to this industry. Also, it is the main highlight in the budget for the sector. This allocation will help create opportunities for jobs in all the related sectors. Connectivity has always helped real estate. As road construction gets augmented with the construction of national highways, the industry is likely to benefit. After a challenging period induced by the pandemic, the real estate sector was hoping for more fiscal and policy support. This will now contribute significantly to the creation of 60 Lakh jobs by the government and the big target of $5 trillion.

The Increasing housing demand, opening & reopening of more offices, and the governments push towards the affordable housing segment are all together helping in a significant recovery.

Fresh launces

Across India, the real estate sector has shown us enough resilience and gracefully maintained its position in challenging years that were hurt by the pandemics and blockades. Meanwhile, the residential & housing sector showed a solid bounce-back throughout these years.

Very Low Prices

As so many homes on the market havent been sold yet, prices are likely to rise slowly. People who wanted to buy a home but were waiting for the pandemic to end are now interested in investing in real estate. Prices are still reasonable, and developers are giving serious buyers big discounts. The Indian governments continued focus on the affordable housing market also drives up demand. This demand will lead to strong sales in Indias real estate market in 2022 and 2023.

Government Push

Considering the problems caused by the pandemic, the Indian government is refocusing its efforts on the mission of "Housing for All." The fact that the government recently extended the Pradhan Mantri Awas Yojana (Gramin) program until 2024 shows that it will continue to help people. Also, the focus of the exchequer on tier-II and tier-III cities has given real estate developers more confidence to start new projects in these cities. This will increase the demand for housing by a huge amount.

With the Credit Linked Subsidy Scheme, its easier for people from economically weaker sections to buy a home, which will help the real estate market recover strongly in 2022 and 2023.

Together, the increasing demand for housing, the reopening of offices, and the governments help for affordable housing contribute to a strong recovery of the real estate market in India. The Indian real estate market will start to get better in 2022 and 2023.


According to Savills india, real estate demand for data centres is expected to increase by 15-18 million sq. ft. by 2025.

Demand for residential properties has surged due to increased urbanization and rising household income. India is among the top 10 price appreciating housing markets internationally.

Organised retail real estate stock is expected to increase by 28% to 82 million sq. ft. by 2023.

Attractive Opportunities

As per ICRA estimates, Indian firms are expected to raise >Rs.3.5 trillion (US$ 48 billion) through infrastructure and real estate investment trusts is 2022, as compared with raised funds worth US$ 29 billion to date.

Private market investor, Blackstone, which has significantly invested in the Indian real estate sector (worth Rs. 3.8 lakh crore (US$ 50 billion), is seeking to invest an additional Rs. 1.7 lakh crore (US$ 22 billion) by 2030.

Policy Support

Driven by increasing transparency and returns, theres a surge in private investment in the sector.

Indian real estate attracted US$ 5 billion institutional investments in 2020, equivalent to 93% of transactions recorded in the previous year.

The real estate segment attracted private equity investments worth Rs. 23,946 crore (US$ 3,241 million) across 19 deals in Q4 2021.

Increasing Investment

In the first-half of 2021, India registered investments worth US$ 2.4billion into real estate assets, a growth of 52% YOY.

Construction is the third-largest sector in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at US$ 52.48 billion between April 2000 to December 2021.

THREATS Buying Vs Investing

Personal finance experts say since prices have been stagnant for the past five years, the time-value of owning a home is good. However, most experts were not in favour of buying a second home for investment purposes, as residential properties are low income yielding assets.

Low Return in Investment

Though chances of increase in real estate prices are high, yet experts are mostly advising against committing a large sum in real estate for the purpose of investment. They argue the returns from investment in real estate might be limited. "I wouldnt recommend buying a house for investment purposes as the return might not be very high, plus there will be maintenance costs and if one wants to sell it isnt as liquid as youd want your investment to be," says Shweta Jain, CFP, Author, Founder Investography.

Cost Overruns

Real estate development can be highly lucrative, but profits can quickly erode due to cost overruns. From fluctuating labor and material costs to unexpected snags and change orders, budgets can be blown. The developer takes all the risk of cost overruns, and the best way to avoid them is to overbudget in the first place by adding a buffer of 10% to 20%. Its also a good idea to add an extra 10% or 15% in time for each project stage to account for inevitable delays.

Misreading the Real Estate Market

In the real estate development world, it can be a costly mistake to assume "If I build it, they will come." Developers should pursue projects driven by current market needs— not by hoping to create a need. To get a good read on the market, developers evaluate the trade area and a wide variety of factors, including economic, educational, employment, and environmental considerations.

Design Defect losses

Architects generally maintain professional liability insurance to protect against mistakes like specifying the wrong type of concrete or miscalculating a structural load. However, the losses caused by design errors can far exceed policy limits, especially where significant construction projects (e.g., $50+ million) are concerned. That means the developer could end up bearing a devastating loss.

Job Site Risks

Construction sites are inherently risky, and those hazards need to be identified and evaluated. Appropriate safety plans and procedures need to be put in place. According to the Occupational Safety and Health Administration (OSHA), the fatal injury rate for the construction industry is higher than the national average for all other industries. The most common injuries are:

Falling, Slipping and tripping, Airborne and material exposure, "Struck-by" accidents (when a worker is hit by a vehicle, falling object, or flying object), Excessive noise, Vibration-related injuries, Scaffold-related injuries, Electrical incidents, Burns, Material handling.

The Bottom line

Real estate development isnt for the faint of heart. While projects can be rewarding and yield impressive returns, developers face numerous challenges from start to finish. The most successful real estate developers are the ones who know how to acknowledge, plan for, and reduce those risks.


During the year the revenue from real estate segment stood at ? 3362.59 Lakhs as compared to ?7683.78 Lakhs for FY 20212022.

During the reporting period the income earned from services provided by company was ? 1025 Lakhs as compared to income of ? 890.52 Lakhs of FY 2021-2022.


The Company had 68 permanent employees as on March 31, 2022 at various levels. The Company has a HR Policy in place and encouraging working environment. The Company has continued to focus on various aspects like employee training, welfare and safety thereby maintaining a constructive relationship with employees.


In accordance with SEBI (Listing Obligations and Disclosure requirements 2018) (Amendment) Regulations 2018, the Company is required to give details of significant changes (Change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios:

Ratios FY 2021 2022 FY 2020 2021 Explanations
Trade Receivables Turnover 1.58 3.05 Revenue from operations were reduced during the year and Trade Receivables were increased due to the unbilled revenue component of civil works contracts. Hence, this ratio was declined.
Current Ratio 3.23 2.91 Current liabilities paid out during the year therefore there is increase in Current ratio
Net Debt Equity Ratio 0.64 0.75 Bonus shares issued during the year therefore there is increase in equity capital.
Net Profit Margin % 0.15 0.15 No change
Return on Net Worth % 27.41 34.52 Change in equity is due issue of Bonus shares during the year therefore there RONW ratio is decreased.


Indias real estate sector is witnessing a healthy increase in demand in 2022 and this momentum is expected to hold for the rest of the year. From commercial spaces to the residential market, the overall market outlook is a bright one for the real estate industry. FY2021-22 was an exciting year for the real estate sector and company as well wherein we witnessed second wave led demand deferment in the first quarter, followed by a brisk sales recovery in the later part of the year. Post-pandemic, developers have moved away from the traditional way of doing business and rightly focused on end-user customer demand with a strong focus on innovation and digital transformation. We believe FY2022- 23 will witness a healthy sales momentum backed by solid structural foundation, sustained demand and relatively affordable mortgage rates. Financially strong and reputed developers with superior execution capabilities stand to benefit disproportionately from the ongoing cyclical upturn. Despite the volatility we expect the performance to continue in FY2022-23, given our exciting pipeline and execution expertise. We look forward to adding a large number of projects to our portfolio in FY2022-23, which is amongst our top priorities and which will enable us to grow rapidly going ahead.In the past year, the real estate index has risen by 75% and is the second-best performing sector index, largely beating the benchmark index Nifty50. Bolstered by historically-low loan rates and temporary stamp cuts, the real estate has not only made a comeback but is expected to flourish in the year to come.


The real estate sector in India is set to experience around 5% capital value growth in 2022 in the residential segment. Certain projections state that the sales momentum is expected to increase in 2022 as prospective homebuyers will continue to prefer bigger homes, better amenities and attractive pricing will keep them interested in sealing the deals. Meanwhile, as work resumes in offices, the recovery in the commercial sector and flight-to-quality trend is expected to keep rents stable to increase in 2022. Additionally, the luxury housing market is poised to touch new heights in the coming year.


A number of initiatives have been undertaken by the Government of India with the hope of incentivizing real estate purchases. The announcements made in the Union Budget 2022-2023 will help in creating a thriving atmosphere in the real estate sector. The government continues to prioritize the affordable housing segment and parallelly looking at ways to strengthen the existing financing systems to provide liquidity to stuck real estate projects. In the first week of December, the Government of India extended the deadline to provide pucca houses to all families in rural India to 2024. The Cabinet decided that the flagship rural scheme, Pradhan Mantri Awas Yojana-Gramin will be provided INR 2.17 lakh crore in additional Central and State funding to achieve its target of building 2.95 crore houses. The Reserve Bank of Indias (RBI) Monetary Policy Committee (MPC) has announced that it will be keeping the repo rate and reverse repo rate unchanged for the tenth consecutive time.


NITI Aayog expects that the Indian real estate sector will reach a market size of $1 trillion by 2030 and will account for 13 per cent of Indias GDP by 2025. Already the third-largest sector to bring about economic growth, the real estate industry is expected to continue its upward trajectory in 2022.