Lodha Developers Ltd Management Discussions

Review of the Global Economy

Global economic growth in CY25 was moderate and slower as compared to earlier periods, shaped by a complex interplay of policy shifts, trade distortions and emerging structural tailwinds. The recent conflict in West Asia involving the USA, Israel and Iran has triggered significant humanitarian and economic disruption. Intensified military actions and retaliatory strikes have led to infrastructure damage, disruption of supply chains and heightened regional instability, severely impacting daily life across multiple countries.

From an economic standpoint, the conflict has destabilised global energy markets, particularly due to tensions around the Strait of Hormuz, a vital maritime chokepoint for international oil transit. With crude prices surging above US$100 per barrel, global inflation has intensified alongside rising fuel costs, triggering a cascading effect on supply chains, with shipping routes disrupted, insurance costs rising and transit times increasing as vessels reroute. While policy makers grapple with the immediate fallout of the conflict, a protracted conflict threatens to severely impact the global growth and destabilise inflation forecasts. According to the International Monetary Fund (IMF), the global economy grew at 3.3% in CY25, in line with CY24,yet remaining well below the averages seen between FY00 and FY19. Within this landscape, emerging and developing economies have notably outperformed their developed counterparts, reflecting strong demographic momentum, robust infrastructure demand and resilient domestic consumption across key markets.

Looking ahead to CY26, the IMF, assuming a short-lived conflict, projects global growth of 3.1% in its April 2026 report, a downward revision of 0.2 percentage points from its January 2026 forecast. Unlike historical geopolitical disruptions, the protracted nature of the current conflict carries the distinct potential to precipitate substantial downward revisions to global economic growth. A swift resolution of the conflict and the resultant normalisation of trade, supported by decisive policy measures could significantly mitigate some of these concerns.

Global inflation moderated to 4.1% in CY25, down from 5.9% in CY24, partially reflecting a softening in commodity prices and cooling demand pressures in some economies. Nevertheless, inflationary pressures persist as structural factors such as supply chain costs and localised labour market tightness, combined with idiosyncratic factors like US imposed tariffs contribute to price increases for specific goods, particularly in the USA.

According to IMF forecasts, under an adverse scenario, broadly anchored to market conditions prevailing toward the end of March, global GDP growth could decelerate to 2.5% while inflation climbs to 5.4%. In a more severe scenario, assuming energy market dislocations extend into the next year, alongside a de-anchoring of inflation expectations and a tightening of financial conditions, the global economy would risk a near-recessionary state, with growth stagnating around 2% through CY26 and CY27, while global headline inflation nears 6%. These projections underscore that the downside risks stemming from a prolonged conflict remain significant.

Central banks entered CY25 with elevated policy rates relative to pre-pandemic norms in order to control inflation that surged between FY22 and FY24. The Federal Reserve cut interest rates several times throughout the year but now remains cautious about further rate easing until inflation moves closer to the target. Given the inflationary pressure mounting, it is unlikely that there would be further easing of monetary conditions over the next 12-18 months.

Industries globally are facing persistent delays, cost pressures and demand uncertainty. Looking ahead, while temporary interventions may stabilise markets, a prolonged conflict risks triggering sustained inflation, weaker global growth and continued supply chain volatility, especially for energy-dependent economies like India.

The outlook for the upcoming fiscal remains cautious, with the dark clouds of the conflict looming over the growth prospects and inflation, even as markets adapt to evolving monetary, fiscal and trade conditions. The most significant monitorable moving forward will be the trajectory of the ongoing conflict in West Asia, given its potential to exert far-reaching implications across both the regional landscape and the global economy. Ultimately, the evolution of this conflict will dictate energy price stability, supply chain continuity and broader business sentiment worldwide.

Any prolonged escalation could have an outsized impact on global growth, particularly for energy importing nations. Conversely, signs of de-escalation could provide much-needed stability to markets and support a more favourable economic outlook. As such, the direction and intensity of the conflict will remain a pivotal factor influencing global macroeconomic conditions in the near to medium term.

Review of the Indian Economy

In CY25, the Indian economy continued to demonstrate strong growth momentum relative to global peers, sustaining its position as the fastest growing major economy in the world. The Reserve Bank of India (RBI) estimates real GDP growth for FY26 at 7.7%, up from the 6.5% delivered in FY25. Given the impact of the conflict in West Asia, economic growth is expected to moderate in FY27. In response to these geopolitical headwinds, the RBI has calibrated its growth projection down to 6.6%, a rate that remains exceptionally healthy within the current global landscape. Reinforcing Indias underlying resilience despite the Middle East war, the World Bank, IMF and ADB have upgraded Indias GDP growth projection for FY27, potentially influenced by a reduction in anticipated tariff pressures. These agencies project Indias GDP growth for the coming year to range between 6.5% to 6.9% (as on April 2026),signalling healthy growth amid global headwinds. Despite this, India remains the worlds fastest-growing major economy by a considerable margin. This resilience is anchored by a strong domestic demand side, characterised by steady private consumption, sustained government capital expenditure and robust credit growth, alongside consistently resilient high-frequency indicators such as the PMI and GST collections. Inflation, which remained benign through FY26, faces some upside risk from imported energy costs but is projected by the RBI to remain within manageable limits. With inflation under control, the central bank is likely to maintain a neutral-to-accommodative monetary stance, calibrating the policy rate against average inflation trends and broader growth prospects. This balanced approach is expected to support corporate investment and borrowing activity while simultaneously safeguarding domestic price stability.

The RBI was proactive in responding to the evolving inflation and growth dynamics in CY25, reducing interest rates from 6.25% at the beginning of the year to 5.00%, signalling support for economic growth amid easing inflationary pressures. In its latest policy meeting, the central bank has rightly chosen to hold rates rather than implement further cuts, given the emergence of recent supply shocks. Borrowers continue to benefit from the 125 basis points of cumulative cuts already delivered across FY26, ensuring that the financial system enters FY27 backed by healthy liquidity and strong balance sheets across both the banking and corporate sectors.

Domestic reforms and disciplined fiscal management played a pivotal role in anchoring Indias economic performance through the year. The Union Budget FY27 reinforced this trajectory of fiscal consolidation, maintaining the deficit at manageable levels, while continuing to prioritise capital expenditure and infrastructure investment. This sustainedpubliccapex,alongsidetargetedincentivesformanufacturing, logistics and other strategic sectors, has strengthened medium-term growth prospects and global competitiveness. Collectively, these measures have preserved growth momentum and provided a vital buffer against external and global macroeconomic shocks.

While the domestic growth impetus remains largely intact, the outlook for CY26 is constrained by shifting geopolitical dynamics, driven by the conflict in West Asia alongside prolonged delays in trade negotiations with the US. Nevertheless, most forecasts project robust growth for India, which is expected to remain one of the fastest-growing major economies globally, underpinned by broad-based domestic demand and sustained reform momentum.

Continued political and structural reforms, including further trade agreements, improved ease of doing business and infrastructure acceleration is expected to bolster investor confidence. The US–Israel–Iran conflict impacts India primarily through energy and trade channels. With an oil import dependence exceeding 80%, rising crude prices threaten to increase domestic inflation, widen the current account deficit and place downward pressure on the rupee. Disruptions in the Strait of Hormuz also increase shipping costs, creating a drag on trade volumes, supply chain continuity and overall economic growth. To support sustained growth, the Indian government must focus on continuing to boost investment and productivity by enhancing infrastructure, improving ease of doing business and incentivising innovation and technology adoption. Strengthening fiscal discipline while targeting strategic sectors, supporting exports and fostering skill development will be crucial to maintaining this economic expansion. Additionally, policies that encourage private sector participation, attract stable foreign investment and maintain macroeconomic stability remain key to achieving robust and inclusive growth. Moving forward, the Government must continue to invest in bridging skill gaps, particularly in industry-relevant professional capabilities, to ensure that the workforce is future-ready and to create a strong pipeline of highly skilled talent.

India Real Estate Industry Overview

Despite a range of external and internal challenges in CY25, including concerns over AI-led employment displacement, regional geopolitical tensions including the India-Pakistan conflict and broader macroeconomic uncertainties, India continues to outpace its global peers in economic expansion. The real estate sector has emerged as a vital pillar of this momentum. While the initial post-pandemic recovery was predominantly driven by the housing segment, commercial leasing has gained significant momentum over the past 12-18 months, with CY25 recording the highest-ever volume of net office space absorption. The hospitality sector continues to perform exceptionally well, with Average Daily Rates and occupancy levels reaching record highs, reflecting a potent mix of robust domestic leisure travel and a steady revival in inbound international tourism. Similarly, the retail segment is thriving, with heavy footfalls in malls and high streets. Supply however continues to lag behind this surging demand, underscoring a critical need for new retail infrastructure. Across all real estate segments, brand consolidation, professionalisation and adoption of global best practices have strengthened market resilience, while transparency and corporate governance reforms are systematically addressing historical gaps, significantly enhancing developer accountability and boosting investor confidence.

As India transitions from a low-income to a middle-income economy, rising household incomes and increased discretionary spending are expected to provide a sustained long-term growth runway for residential, commercial and mixed-use real estate. Over the next decade, the sector is poised to play an increasingly central role in the economic landscape, acting not only as a contributor to GDP but also as a primary engine for employment generation and capital formation. Driven by rising urbanisation, infrastructure development and evolving consumer preferences, the sector is set to mirror trajectories observed in mature economies, where real estate consistently drives wealth creation, urban transformation and broader economic diversification.

India Housing Market Overview

Indias growing population, robust economic expansion, rising wages and accelerating urbanisation are poised to sustain strong housing demand over the coming years. A clear shift in buyer preference toward branded developers is underway, with execution capability, timely delivery and project quality emerging as primary market differentiators. Policy reforms over the past decade, combined with lessons learned by developers, homebuyers and capital providers alike, have fostered a more rational and transparent housing ecosystem, ensuring that market expectations and delivery are far better aligned. As disposable incomes rise, homebuyers are becoming increasingly discerning, prioritising superior design, construction quality and long-term value.

The residential market in Indias leading cities is entering a phase of maturity, marked by measured growth, consolidation of market share towards established developers and sharper focus on timely execution, construction quality and affordability. Despite muted launches in CY25 compared to CY24, the total value of housing sales in the top-7 cities rose from H 5,600 Bn to H 6,000 Bn (Source: Anarock) , reflecting strong absorption and sustained demand. While the sales value has grown, unit absorption fell by 14% Y-o-Y in CY25 (Source:Anarock) . This divergence is primarily attributed to a supply deficit in the affordable housing segment, with reputed developers pivoting increasingly towards the premium segment, moving away from this price-interest rate sensitive category over the past three years as interest rates climbed. This constrained supply in the affordable segment, coupled with a growing consumer preference for premium housing, has driven average unit prices upward, reinforcing the post-pandemic premiumisation trend. Consequently, the combination of fewer launches and robust premium demand has kept overall inventory overhang exceptionally low.

In developed economies, housing is typically a cyclical industry, as supply eventually tends to overshoot demand. As India continues on its trajectory towards becoming a middle-income economy, the structural demand for housing remains robust, driven by an expanding base of households becoming home ownership capable. The primary challenge lies on the supply side, which must effectively scale up to meet this rising demand. Failure to do so risks triggering price inflation that outpaces the wage growth, ultimately jeopardising market affordability. As the housing sector undergoes significant consolidation, market share has concentrated among branded developers, placing the onus of maintaining pricing discipline squarely on these tier-1 developers. This critical combination of steady volume growth, calibrated price growth, focus on execution and timely delivery, will ensure that housing in India remains a resilient, long-term structural play.

Looking ahead, the recent easing of interest rates is expected to catalyse a gradual recovery in the affordable and mid-income housing segments, which had borne the brunt of tighter monetary environment over the past four years. Lower borrowing costs should materially improve affordability and revive end-user demand, while greater price stability is likely to reinforce buyer confidence. CY26 is poised to be a constructive year for the residential real estate market, with demand expected to remain resilient across all product segments.

MMR Housing Market

The Mumbai Metropolitan Region (MMR) continues to be the largest housing market in India accounting for 30.1% of the new launches and 32.3% of the absorption within the top 7 cities in CY25. The launches remained muted in CY25, following sharp decline in CY24, a trend that effectively kept the inventory overhang within a healthy range of 17 months at the end of CY25.

With a population of nearly 25 Mn and GDP of US$140 Bn, MMR stands as Indias most important urban economic engine (Source: ISEG Foundation/ Niti Aayog, Sep-2024) . This places MMRs per capita income at ~US$ 5,500, which is significantly higher than the national average. Propelled by significant infrastructure investments and strategic policy intervention for key sectors, the state government has outlined a roadmap to double Maharashtras GDP by the end of the decade, targeting US$1.5 Tn by 2047. For the MMR, this growth trajectory is projected to elevate per capita income to nearly US$10,000 by the end of decade and to ~US$38,000 by 2047, providing an exceptionally strong, multi-decade macroeconomic tailwind for the real estate sector. To accelerate MMRs economic momentum, an extensive pipeline of large-scale infrastructure projects is actively being deployed. The recent commissioning of the Mumbai Trans-Harbour Link and the Coastal Road, alongside the commercial launch of the Navi Mumbai International Airport and expanded Metro networks, highlights the rapid execution of this infrastructure pipeline.

Over the next two years the region is poised to see delivery of several large-scale infrastructure projects, such as multiple metro lines, the Worli connector, the Airoli-Palava freeway, the Mumbai-Ahmedabad bullet train project, the Goregaon-Mulund Link Road and the extension of the coastal road toward Versova. The State Government is also expanding the regions economic footprint well beyond traditional limits, driven by the development of a 3 rd Mumbai near Navi Mumbai and a 4 th Mumbai near the upcoming Vadhavan port. The MMR housing sector is poised to be a primary beneficiary of the significant increase in the per capita income and sweeping infrastructure development, anchored by an expanding metro network, improving road connectivity and the newly operational Navi Mumbai International airport. The peripheral central suburbs dominated the market, accounting for 25% of total launches and 26% of absorption by unit volume across the MMR. This collective market share is poised to expand further, driven by two structural tailwinds. First, severe land constraints and prohibitive pricing in core micro-markets continue to push development outward. Second, accelerating transit connectivity is making these peripheral nodes increasingly attractive to homebuyers by offering competitive pricing, greater open spaces, and larger unit configurations. Improved connectivity is already catalysing the emergence of new high-growth residential corridors across MMR markets. At the same time, the region is poised for a notable acceleration in redevelopment activity across the island city, unlocking premium residential inventory in historically land-constrained micro-markets.

As developers actively acquire strategic land parcels to secure future development pipelines, the MMR residential market remains well-positioned for sustained long-term growth. Supported by substantial public infrastructure investments and a steady improvement in urban liveability, capital values across the region are projected to appreciate steadily over the medium to long term.

Pune Housing Market

Punes residential market demonstrated strong equilibrium in CY25, with new launches reaching 67,950 units against an absorption of 65,100 units. This balanced demand-supply dynamic maintained the regions inventory overhang at a lean 15 months, a stark contrast to the 48-month peak recorded in CY20. Geographically, North Pune continues to anchor the region, capturing 34% of launches and 35% of sales, followed closely by West Pune, which accounted for 30% of supply and 33% of total absorption.

This stable housing demand is underpinned by Punes highly diversified employment landscape. While traditionally dominated by the IT and automotive industries, the citys economic foundation is further strengthened by the manufacturing, engineering and defence sectors. Despite concerns around AI led disruption on IT job creation, the citys multifaceted industrial base and deep talent pool ensures that it remains a leading employment hub. This is evidenced by Punes recent emergence as a preferred destination for Global Capability Centres (GCCs), which continue to drive large-scale, high-skilled job creation. This economic diversity lends a high degree of predictability and resilience to Punes housing demand, insulating it from cyclical downturns in any single sector. Backed by rising wages, the market is witnessing a steady structural pivot towards higher-priced housing. The market share of launches for homes priced under H 40 lakh contracted from 19% in CY24 to 13% in CY25. Conversely, the premium mid-market segment, priced between H 80 lakh and H 1.5 crore, expanded significantly, growing from 31% to 39% over the same period. This trajectory reflects the citys robust economic outlook and the increasingly discerning lifestyle standards of its upwardly mobile workforce.

Overall, the market outlook remains positive, characterised by healthy end-user demand, improving connectivity, expanding urban infrastructure and steady capital value appreciation over the medium term.

Bengaluru Housing Market

The Bengaluru housing market demonstrated strong momentum in CY25, with new launches reaching 74,250 units against an absorption of 62,200 units, maintaining a lean inventory overhang of 13 months. East Bengaluru maintained its market leadership position, capturing a 45% share of both new launches and absorption. At the same time, the citys footprint is expanding northwards, driven by proximity to the international airport and the development of large-scale office parks tailored for GCCs.

Driven by shifting customer preferences and price appreciation, the market is undergoing a sharp pricing realignment. The share of new launches priced between H 40 lakh and H 80 lakh contracted sharply from 27% in CY24 to just 8% in CY25. Conversely, the premium segment, comprising homes priced between H 1.5 crore and H 2.5 crore, witnessed a massive surge, with its share of new launches expanding from 24% to 45% over the same period, underscoring a structural shift toward high-end residential inventory.

In tandem with rising capital values, the residential market continues to witness a structural shift in buyer preferences, moving away from the compact configurations of the pre-pandemic era toward larger, more expansive residences within well-planned, amenity-rich developments. The pandemic fundamentally reshaped how homebuyers perceive their living spaces, placing greater importance on comfort, flexibility and overall quality of life. As a result, buyers today increasingly prefer larger homes capable of accommodating hybrid work arrangements, dedicated study areas and enhanced living spaces.

Simultaneously, demand is converging toward integrated residential developments that offer a comprehensive suite of lifestyle amenities such as open green spaces, recreational facilities, wellness infrastructure and community-oriented features. This shift reflects a broader aspiration among homebuyers to upgrade their living standards and prioritise holistic living environments. Consequently, the preference for larger homes within well-designed, amenity-rich projects is expected to remain a defining characteristic of Bengalurus residential demand over the medium term.

NCR Housing Market

The National Capital Region (NCR) has demonstrated a remarkable turnaround since the pandemic, with inventory overhang plummeting from 88 months of average sales in CY20 to a lean 19 months at the close of CY25. The NCR market witnessed new launches of 61,800 units and absorption of 57,200 units in CY25. Mirroring other tier-one cities, the region is experiencing a sharp divergence across product categories, with the premium segment continues to expand its footprint while the affordable and entry- level segments continue their downward trajectory.

Going forward, the NCR residential market is poised for further consolidation, underpinned by a structural shift toward an upwardly mobile, brand-selective demographic. Demand is increasingly gravitating toward tier-1 developers with proven execution capabilities, reinforcing the dominance of organised players in the region.

While near-term sales volumes and capital values are poised to moderate against a high baseline, this phase of price stabilisation is expected to create attractive entry opportunities for well-capitalised developers to build and replenish their project pipelines at more calibrated pricing levels.

The demand momentum is projected to remain firmly skewed toward premium and luxury housing, driven by evolving buyer aspirations and rising income levels. In contrast, the affordable housing segment is unlikely to see a meaningful recovery over the short to medium term, as elevated land costs, compressed margins and tighter project viability continue to constrain fresh supply, effectively limiting developer participation in this price-sensitive category and cementing premiumisation as the dominant narrative for the NCR market over the medium term.

Opportunities

Despite a five-year market upcycle triggering concerns of a cyclical peak and subsequent moderation in demand, the underlying fundamentals remain robust. India continues to face a significant shortage of quality housing, and homeownership penetration remains relatively low. As disposable income levels rise and affordability improves, a larger segment of households is expected to achieve the financial ability to purchase homes, ensuring a gradual but sustained expansion in demand, indicating that the current upcycle appears to be structural rather than merely cyclical in nature. We believe that the sector is still in the early phases of a multi-decade housing growth trajectory, with considerable headroom for long-term demand evolution.

Indian Housing Demand: Structural Drivers Outweigh Cyclical Trends

Globally, housing markets are highly cyclical, typically peaking on 5 to 6 year horizons. While this may suggest a similar peaking trajectory for India, the domestic housing demand remains fundamentally structural rather than cyclical, insulated by long-term macroeconomic tailwinds. Rising household incomes remain the primary catalyst, expanding homeownership capability. As Indias per capita income scales from US$ 2,000 to US$ 5,000 over the decade, the number of homeownership-capable households is projected to more than double, expanding from ~77 Mn to nearly 175 Mn.

The Indian real estate sector remains significantly under-penetrated, contributing ~ 7% to national GDP, as compared to 13–15% in developed economies and 21% in China. While short-term disruptions from interest rate fluctuations, commodity cycles or geopolitical tensions may persist, a decade of structural reforms, such as RERA, demonetisation and GST, along with tighter lending norms, have largely addressed past supply-side excesses, fostering a disciplined, transparent market where real estate acts as a key driver of broader economic growth.

Long-term housing demand remains firmly anchored by accelerating urbanisation and the growing nuclearisation of families. As employment opportunities concentrate in urban centres, persistent rural-to-urban migration will continue to fuel organic end-user demand.

As one of Indias largest real estate developers and most recognisable institutional brands, we are uniquely positioned to be a primary beneficiary as these multi-decade structural trends unfold.

Supply and Demand Consolidation

Historically, the Indian housing sector was largely perceived as a commoditised product, where securing land, capital and approvals were deemed sufficient for development and homebuyers rarely differentiated between developers based on execution track record or delivery capabilities. However, systemic challenges and widespread project delays over the past decade have fundamentally transformed consumer risk perception. Today, homebuyers exhibit a decisive preference for established, branded developers, often demonstrating a willingness to pay a premium for the assurance of timely delivery and quality, execution certainty and superior construction quality within their preferred micro-markets.

A similar shift has been observed within the financial ecosystem. Historically, capital providers demonstrated a higher risk appetite, extending credit to relatively unproven developers. However, substantial non-performing assets arising from legacy underwriting vulnerabilities over the past decade have necessitated a more cautious, risk-averse approach. Following a prolonged period of balance sheet de-leveraging and repair, banks and NBFCs are now far more discerning, implementing rigorous evaluation frameworks, prioritising corporate governance, operational capability and delivery track record.

As access to capital has tightened from both homebuyers and capital providers, many smaller developers have transitioned toward land monetisation or exited the sector entirely. This has accelerated simultaneous demand and supply-side consolidation, with homebuyers, capital providers and landowners increasingly gravitating toward credible, branded developers.

This shift has realigned operational dynamics within the real estate value chain.Established developers now command stronger negotiating leverage during land acquisition and partnerships, particularly in structuring joint development arrangements (JDAs).

Leveraging our strong brand and proven execution track record, we are well positioned to drive consistent pre-sales growth while emerging as the partner of choice for landowners seeking development through the JDA model, effectively driving capital-efficient, highly scalable growth while optimising project profitability.

Geographic Expansion as a Growth Catalyst

Demand and supply-side consolidation is progressing steadily across Indias top metropolitan markets. However, several high-potential cities continue to lack an adequate presence of Grade-A, branded developers, limiting the pace of this transition. In these markets, homebuyers are constrained to transact with unbranded developers or defer their purchase decisions until credible supply becomes available. Against this backdrop, we have adopted a calibrated and disciplined framework for market expansion. Over the past three years, we have systematically reinforced our presence across high-growth micro-markets within the MMR, Pune and Bengaluru. Building on this foundation, we are now focused on scaling our presence in Bengaluru, while also entering NCR, which we have identified as our next strategic market.

Over the next 2–3 years, we intend to launch pilot projects in the NCR to establish our footprint and validate the regional product-market fit. While expanding our geographic presence, we remain firmly committed to maintaining the highest benchmarks of product quality and ensuring timely delivery. Moving forward, we will continue to evaluate further expansion opportunities in a measured manner, both across new cities and within existing markets.

AI-led opportunity through Data Centres

India has rapidly emerged as a premier destination for global AI-driven data centre capacity, as hyperscalers and sovereign AI programmes look beyond the saturated markets of the USA, Europe and South-East Asia. Amidst intensifying geo-political challenges across the Middle East, India offers a highly stable, cost-efficient alternative with immense scale. Some industry estimates project Indias installed capacity to scale from 1.5 GW to as high as 12-15 GW (source: Astute Analytica) over the next 5–7 years. Given the significant capital expenditure advantages and low operating costs, driven by competitive power tariffs, India is rapidly transitioning from a regional digital infrastructure market into a leading global hub for data centres.

This paradigm shift presents an extraordinary opportunity for us. We are developing one of Indias largest data centre parks within our Palava township with ~400 acres of shovel-ready land earmarked for this purpose. Our strategy entails monetising ~ 3/4 th of this land through outright sales to fund the development of a 1GW (gross power) of built-to-suit (BTS) powered shell. By leasing these premium assets to global operators, we will secure long-term, high-yield revenue streams within a highly capital-efficient framework.

Threats and Challenges

While we remain well positioned to capitalise on the long-term growth opportunities in the Indian real estate sector, certain near- to medium-term risks require disciplined risk management and strategic navigation.

Affordability Compression Risk

A prolonged divergence between housing price inflation and income growth could reduce affordability, leading to demand deferral, particularly from first-time homebuyers within the mid-income and affordable segments.

Demand Moderation Due to Macroeconomic Weakness

A prolonged economic slowdown could weaken consumer confidence, reduce discretionary spending and delay home purchase decisions, affecting absorption levels across markets.

Employment and Income Volatility

Disruptions from automation and AI alongside slower job creation, could create uncertainty around income stability, historically one of the most critical drivers of housing demand.

K-Shaped Demand Divergence

Uneven income growth may skew demand heavily toward premium housing, while affordable and mid-income housing segments experience prolonged stagnation, culminating in an imbalanced market.

Cost Inflation and Margin Compression

Geopolitical volatility and supply chain disruptions could trigger inflationary spikes in key input costs, including cement, steel, labour, impacting project viability and developer margins, particularly for fixed-price projects.

Calibrated Supply Response

Amid fluid demand and rising input costs, developers may adopt a cautious stance toward new launches, leading to potential supply-demand mismatches in certain micro-markets.

Our management, in close consultation with the Board, maintains vigilant oversight over these evolving external variables. We remain deeply committed to responding proactively and with agility to effectively mitigate emerging risks and preserve shareholder value.

Strengths

We are among the largest real estate developers in India, with a four-decade legacy of delivering premium projects and a reputation as a leading consumer brand in the sector. While residential real estate remains and will continue to be our core business, we are steadily expanding our annuity portfolio through high street retail, warehousing, data centres and select office assets. Over the years, we have built distinctive operational capabilities and competitive strengths that clearly differentiate us within the industry.

Trusted and aspirational consumer brand

Our brand is strongly associated with delivering a luxurious lifestyle and is a name that buyers aspire for.

The brand equity positions us as the partner of choice for land owners, giving us a distinctive competitive advantage on both the demand and supply sides.

The strength of the brand is reflected in the fact that repeat buyers and customer referrals account for 20% of total volumes.

The brand also allows us to command a premium pricing relative to the broader market, as buyers willingly pay a higher price for the assurance of a superior product.

Superior and in-house execution capability

Our brand equity is built upon an exceptional track record of project delivery, achieved primarily by maintaining a vertically integrated, in- house execution capability.

Nearly 50% of our 5,700+ employees are dedicated to construction and design related functions.

This in-house execution capability enables us to consistently deliver quality developments, while optimising costs, effectively mitigating margin leakage to external general contractors.

Granularity in Portfolio

We are the only developer in India, to have successfully demonstrated the ability to sell homes ranging from H 5 Mn to H 3 Bn and do it at scale, while maintaining profitability across all price points.

Our revenue model is insulated from dependency on any particular project, micro market or city. Our pre-sales of H 205 Bn in FY26 was delivered across ~40 locations within the MMR, Pune and Bengaluru and from multiple micro markets and various non-competing project locations within those micro markets.

Such diversification immunises us from localised market downturns and supports consistent pre-sales growth.

Ability to acquire land

Transitioning from a strategy of developing projects exclusively on owned lands four years ago, we have now adopted a balanced mix with projects on owned lands and asset light JDAs. This strategy allows us to expand our footprint, without placing undue stress on our balance sheet.

Backed by our superior execution capability, we are a developer of choice for land owners, providing them with a high degree of revenue predictability and optimal financial returns during land monetisation.

Decentralised Management

Real estate remains an inherently localised business. Regulatory frameworks, permitting ecosystems and consumer behaviour vary significantly between different cities and often between micro markets within the same city.

Acknowledging these nuances, our corporate philosophy dictates that whenever we enter a new geography, we methodically construct localised, autonomous management teams capable of operating as independent business units.

This approach yields better results in the near term, while paving the way for us to achieve market leadership and meaningful scale across all our chosen geographies.

Strategies

Our medium-term objective is to consistently deliver ~20% profit, while maintaining a prudent capital structure. To achieve these financial and operational milestones, we have established the following core strategic priorities.

Ensuring sufficient land stock availability across cities and micro markets

In the real estate sector, land represents the critical raw material required to sustain long-term operational velocity. At the time of our IPO, all our projects were on owned lands, a model that yields higher profit margins but moderate Return on Equity (RoE). Our brand equity and vertically integrated execution capabilities serve as primary enablers of this asset light strategy. An optimum mix of JDA and owned land projects has enabled us to achieve our twin objectives of 20% PAT CAGR in pre-sales while maintaining disciplined capital structure. Backed by strong affinity of landowners towards our brand, we have secured land with nearly H 1,400 Bn of Gross Development Value (GDV) since our IPO, including H 600 Bn in FY26. Consequently, our near-term GDV available for sale (excluding township land banks slated for development beyond the next 5 years) stands at ~ H 2,000 Bn, providing a highly visible and robust pipeline of launches and sales over the medium term.

Measured Entry into New Cities for Sustainable Growth

Our primary target segment is the urban salaried demographic concentrated across Indias top 7 cities. To address this demand, we intend to gradually expand into new cities every 3 to 4 years, after having achieved meaningful scale and operational stability in a previously added city. As the domestic economy expands and urbanisation accelerates, the relevant cities for branded developers is also expected grow in number beyond the current 7 core cities. While geographic expansion acts as a potent growth catalyst, it inherently introduces distinct execution risks, which we mitigate through a two-phase strategy.

Phase 1: Pilot Phase (Years 2-4)

Upon entering a new location, we focus on understanding the local ecosystem, establishing our brand and building relationships with vendors and channel partners. During this initial phase, we launch a limited number of projects, prioritising superior customer experience and execution quality over volume.

Phase 2: Scale-Up Phase

Once our brand is established and the local operational network is secure, we transition to an accelerated growth phase. We then increase land acquisition and allocate greater capital to the location, effectively transforming it from a marginal contributor into a core driver of our pre-sales growth.

Strengthen the Balance Sheet

Given that a substantial portion of our medium-term business development pipeline is already secured, further business development may proceed at a more calibrated pace, thereby requiring lower investment. Consequently, we anticipate a meaningful and sustained reduction in net debt over the next few years. While we will consistently maintain a Net Debt-to-Equity ratio below 0.5x, our ultimate strategic target is to transition our core development business to a net debt-zero position.

Strengthening our balance sheet provides the financial headroom necessary to capitalise on opportunities that may arise in the future upon the sector being adversely affected by an economic slowdown or an unforeseen black swan event. Furthermore, this also guarantees execution certainty, ensuring we can seamlessly fulfil our delivery commitments to homebuyers even during severe market disruptions, such as a pandemic-scale event, where sales velocity and collections might temporarily pause, while construction obligations persist. This disciplined capital structure allows us to deploy surplus cash flows to accelerate growth in the annuity businesses, which we intend to scale significantly over the medium term.

Building Meaningful Market Share Across Key Micro-Markets

We maintain an active operational presence across three of Indias major metropolitan markets and will continue to expand in a calibrated and disciplined manner. However, such expansion is value-accretive only when accompanied by sustained profitability in new markets, an outcome that is achieved through scale and operating leverage within each city.

Prior to our IPO, our presence was limited to three of the seven key regions within the MMR and a single project in Pune. While the brand enjoyed strong recall across these regions earlier as well, we have since significantly expanded our footprint in both cities by adding projects in a non-overlapping and non-competing manner, thereby deepening our penetration across micro-markets and leveraging the benefit of brand salience.

In Bengaluru, our active development footprint has doubled from two locations in the previous fiscal to four active and six total sites, including upcoming launches. We will continue to scale up within the city, as increased local presence enhances project-level economics by leveraging existing infrastructure, channel partner networks and vendor relationships, while also enabling us to serve demand more effectively across locations where the brand is already well established. We have identified the NCR as our next market for entry, where we are initiating a pilot phase. Over time, we intend to scale our presence in the region, replicating the playbook successfully demonstrated in other cities. This calibrated, scale-led expansion strategy will continue to guide our entry into any new markets going forward.

Scaling Up Annuity Income Streams

To diversify and de-risk our business from the cyclicality inherent in residential development, we are focusing on three business segments to generate stable annuity income streams and drive long-term shareholder value. Through this structured approach, we expect to scale-up our annuity income by 10x over the next six years.

Warehousing and Industrial Infrastructure

We are developing warehousing, logistics, in-city fulfilment centres and light industrial facilities. Our goal is to cater to the digitisation of the economy and tap the opportunities arising from growing share of manufacturing in Indian economy. We will continue to scale this vertical within the cities of our core operations.

Portfolio of select high quality office & retail assets

While residential real estate remains our core business, we also develop retail and select office spaces as part of our mixed-use development strategy. Historically, we have monetised such assets; however, over the next few years, we are adopting a more balanced approach, selectively monetising certain assets while retaining others within our annuity portfolio. Assets with strong potential for capital appreciation, driven by superior location, product quality, or high-quality tenant mix, will be prioritised for long-term ownership.

Furthermore, because a significant proportion of these assets will be developed alongside our residential projects on large, mixed-use land parcels, the incremental capital requirement is expected to be relatively low. This integrated development approach enables us to generate attractive returns, resulting in strong and sustainable ROEs from our annuity portfolio.

Data Centres

We believe that data centres will emerge as a strategic asset class, propelled by Indias growing demands and its rapid emergence as a primary hub for global AI workloads. This presents an opportunity for a faster and a highly value accretive monetisation of our land bank at Palava. Strong traction from hyperscalers and global co-location players has significantly driven up our land realisations in Palava over the last five years, increasing from H 26 Mn per acre to over H 210 Mn per acre. This capital appreciation now presents an opportunity for us to further move up the value chain, entering the data centre ecosystem on a sustainable, long-term basis through leasing of powered shell data centres. Our operational roadmap targets the delivery of 1 GW (gross power) of BTS powered shell data centre capacity over the next six years, securing highly predictable, long-term institutional annuity income streams.

Business Performance Overview

In FY26, we achieved record pre-sales of H205 Bn, registering a robust 16% growth over FY25. New location launches contributed ~30% of these pre-sales, while new launches at existing sites accounted for 5%, with the remainder driven by sustenance sales. This balanced operational mix enables us to capture diverse customer demand across varying stages of the construction lifecycle.

City-wise pre-sales performance MMR

The MMR remains our primary volume driver, recording pre-sales of

~ H 160 Bn in FY26, a growth of ~11% YoY. While our established projects such as Lodha Divino, Lodha Bellevue and New Cuffe Parade, maintained robust sales momentum, our new launches at Alibaug and Worli received strong response. Our strategy to expand into under-penetrated MMR micro-markets is now contributing meaningfully to our performance, with incremental growth increasingly driven by these newer micro-markets.

Pune

From a baseline of a single project at the time of our IPO, our operational footprint has expanded to 10 locations across Pune city, contributing H23 Bn to our FY26 pre-sales. Achieving a tenfold increase in pre-sales volume within this market over a five-year horizon validates our strong regional acceptance and execution capabilities. Moving forward, we will continue to allocate capital to acquire new locations within the city, to secure a market-leading share.

Bengaluru

Our active footprint in Bengaluru has scaled to four operational locations, which together contributed ~ H 23 Bn to our FY26 pre-sales. All four locations have received phenomenal response with volumes and the underlying pricing exceeding our initial estimates. As we transition into the expansion phase in Bengaluru during FY27, we intend to acquire further land parcels and aggressively scale our market share across the city.

Completions

In FY 26 we delivered 6.7 mn sq. ft. of built inventory to our customers. Construction velocity during the first three quarters of the fiscal faced temporary headwinds due to industry-wide administrative bottlenecks within the environmental clearance process. However, following structural resolutions, execution momentum recovered sharply from the fourth quarter onwards.

Collections

Our collections grew by 5% YoY to H 151.6 Bn. Collection growth lagged our double-digit pre-sales growth driven by two key factors: due to lower share of RTMI inventory in our sales mix compared to the previous year and a calibrated moderation in construction expenditure than initially envisaged, on account of a few projects in MMR facing delays due to certain environmental approval related issues during the first half of the year.

Warehousing and Industrial Business

Our warehousing and industrial business continues its steady scale-up. We currently have ~5.1 mn. sq. ft. under active development across various assets and locations, of which ~2.6 mn. sq. ft. has already been leased out.

Business Development

In FY26, we added 12 projects to our development pipeline, with a combined GDV of H ~600 Bn, through a combination of outright land acquisitions and JDAs. Backed by the strength of our brand, rapid launch and superior execution capabilities, we remain a partner of choice for land owners across all the cities that we operate. Following this significant volume of recent transactions, the pace of incremental project additions will be more calibrated. We will, however, continue to selectively secure prime land parcels in prominent demand centres that are not currently addressed by our active portfolio. In FY26, we secured two strategic project locations in the NCR and will continue building on that over the coming years.

Sustainability

We rank among the top companies globally for real estate and have featured in the S&P Global Sustainability Yearbook 2026 for the third consecutive year. We are active constituents of the S&P Global Best-In-Class Index and the FTSE4Good Index, while maintaining an A rating from MSCI ESG Ratings. These premier benchmarks evaluate long-term economic, environmental and social performance, validating our proactive execution across critical operational boundaries, including climate strategy, people practices, occupational health and safety, and cybersecurity governance. As Indias first real estate developer with validated Science Based Targets initiative (SBTi) net-zero targets , we have maintained carbon neutrality for our Scope 1 and operational Scope 2 emissions since March 2024. This milestone is driven by an accelerated transition to clean energy, with a ~90% renewable energy share reached across our direct construction activities and standing assets. We treat our portfolio as a living laboratory, field-testing and scaling innovations that will define sustainable urbanisation at Indias pace and complexity. Through the Lodha Foundations Sustainable Urbanisation programme, and our partnership with the RMI India Foundation, we deploy and validate clean energy, urban cooling and material science breakthroughs in real-world conditions. We became the first developer in India to deploy Limestone Calcined Clay Cement (LC3) concrete in residential road pavements, setting a replicable precedent for the sector. Beyond carbon, we are advancing solutions to urbanisations other pressing challenges: water circularity, physical climate risk and air quality, in collaboration with leading research institutions. This work is entirely open-source, with case studies, methodologies and key learnings shared freely, so that developers and municipal authorities across an urbanising India can build on this knowledge rather than reinvent it. Further details on our sustainability initiatives are provided in other parts of this Integrated Report.

Financial Performance Overview

Results of operations

Select financial data from the consolidated statements of profit and loss for FY26 and FY25.

	FY26		FY25
Particulars		(% of Total		(% of Total
	(in J Bn)		(in J Bn)
		Income)		Income)
INCOME
Revenue from Operations	166.8	97.4%	137.8	97.2%
Other Income	4.4	2.6%	3.9	2.8%
Total Income	171.2	100.0%	141.7	100.0%
EXPENSES
Cost of Projects	98.0	57.2%	82.5	58.2%
Employee Benefit Expense	6.6	3.8%	5.4	3.8%
Other Expenses	13.0	7.6%	10.0	7.0%
EBITDA	49.2	28.7%	39.9	28.1%
Adjusted EBITDA*	56.5	33.0%	49.6	35.0%
Finance Costs	6.6	3.8%	5.5	3.9%
Depreciation, Amortisation & Impairment Expenses	3.5	2.0%	2.7	1.9%
Total Expenses	127.6	74.5%	106.1	74.9%
Share of Net Loss in Associates	0.1	0.0%	(0.0)	0.0%
Profit before Tax	43.7	25.5%	35.6	25.1%
Tax Credit/(Expense)	(9.4)	-5.5%	(7.9)	-5.6%
Profit for the Year	34.3	20.0%	27.7	19.5%

*Adjusted EBITDA = EBITDA after Grossing up of Finance cost included in cost of projects.

Our performance during FY26 is reflection of strong execution and operational excellence. The consolidated revenues for FY26 stood at H166.8 Bn vis-à-vis H137.8 Bn in FY25, an increase of 21%.

EBITDA for FY26 stood at H49.2 Bn showing a growth of 23% on a YoY basis. EBITDA margin increased by approximately 60 bps for FY26 as compared to FY25. Adjusted EBITDA stood at H56.5 Bn, reflecting 14% growth over FY25 on a like-for-like basis.

Depreciation and amortisation costs for the year stood at H3.5 Bn (higher by H0.8 Bn), due to capitalisation of commercial assets. As a result, adjusted EBIT stood at H53.0 Bn, up by H6.1 Bn from the previous year. Net finance costs amounted to H6.6 Bn representing about 3.8% of Total Income, largely similar to the previous year.

As a result, consolidated profit before taxes was H43.7 Bn, compared to H35.6 Bn in the previous year. The consolidated net profit for FY26, amounted to H34.3 Bn, compared to a net profit of H 27.7 Bn in the previous year showing a healthy 24% growth on a YoY basis.

Cashflows

Particulars	FY26	FY25
Net cash generated from operating	9.6	15.7
activities
Net Cash Flows used in Investing Activities	(7.8)	(0.9)
Net Cash Flows from / (used in) Financing	15.9	(25.1)
Activities
Net Increase / (Decrease) in Cash and	17.7	(10.3)
Cash Equivalents

Indebtedness

Particulars	FY26	FY25
Gross Debt *	98.8	70.8
Cash & Cash Equivalent	44.7	30.7
Net Debt	54.1	40.1

*Including preference shares issued by a wholly owned subsidiary

As on March 31, 2026, the Company had cash and cash equivalents of H44.7 Bn. As on March 31, 2026, the consolidated net debt stood at H54.1 Bn, up from H40.1 Bn in the previous year, on account of investment spend for acquiring land and development rights. The net debt-EBITDA ratio stood at 1.1x largely similar to the previous year at 1x as on March 31, 2025. Net debt-equity ratio was largely stable at 0.23x compared to 0.2x last year.

Key Ratios

			Change
Ratios	FY26	FY25		Definition	Reason for change
			(%/bps)
Trade	14.8	17.5	-15%	Revenue from Operations/	The decrease is due to higher trade receivables at the
Receivables				Average Trade Receivables	year-end, resulting from an increase in billing milestones
Turnover					in line with higher revenue from operations.
Inventory	2.3	1.6	37%	Cost of project / Average of	The increase is due to a higher cost of projects, aligned
Turnover Ratio				Inventory	with the increase in operational revenue.
Interest Coverage	4.4	3.5	25%	Earnings before Interest	Improvement is driven by higher operating EBITDA,
Ratio				Expenses, Depreciation and	resulting from increased revenue and better operational
				Tax / Interest cost #	leverage.
Current Ratio	1.7	1.7	4%	Current Assets/ Current	The ratio remains unchanged as current assets and
				Liabilities	current liabilities increased in the same proportion.
Debt-Equity Ratio	0.43	0.36	21%	Debt / Total Equity (Share	The improved ratio reflects a stronger capital structure,
				Capital + Applicable Reserves)	driven by an increase in equity from higher internal
					accruals and retained earnings.
Operating Profit	33.9%	36.0%	(214)	Earnings before Interest	The ratio is marginally lower due to a change in the
Margin (%)				Expenses # & Tax less Other	project mix, reflecting a higher share of revenue from
				Income / Revenue from	newer locations with different margin profiles.
				Operations
Net Profit Ratio	20.0%	19.5%	52	Profit After tax / Total Income	The increase is due to higher net profitability, on account
					of lower finance costs, tax expenses etc as compared to
					the previous year.
Return on Net	15.7%	14.6%	106	Profit after tax / Average of	The increase is on account of higher PAT, resulting from
Worth Ratio				total Equity	improved operational revenue, lower finance costs and
					tax provisions.

# Interest cost represents finance cost debited to statement of Profit and Loss and interest cost charged through cost of projects.

Risks and Mitigants

Competition Risk

Risk Profile

While the absolute number of active real estate developers has declined markedly over the past decade; primarily driven by formalising regulatory reforms such as the RERA, demonetisation and GST, the sector is currently witnessing the entry of several large, well-capitalised players, attracted by the structural tailwinds of Indian urbanisation. The entry of these institutional players carries the potential to intensify competition for prime land parcels and market share amongst established real estate developers.

Mitigation Strategy

Sector consolidation has fundamentally restructured the real estate landscape across demand velocity, supply origination, and capital allocation. Homebuyers and landowners increasingly prefer established Grade-A institutional brands with proven execution capabilities and delivery track records. Concurrently, credit providers remain highly selective, preferring to extend capital to branded developers. The entry of conglomerates is expected to capture market share primarily from unbranded developers, thereby accelerating industry consolidation, a structural transition of which we remain a primary beneficiary.

Concentration Risk Risk Profile

As the MMR remains the primary contributor to our consolidated pre-sales volume. Any localised macroeconomic deceleration, regulatory shift, or prolonged demand slowdown within the MMR property market could sectorally expose our revenue trajectory and adversely impact our financial performance.

Mitigation Strategy

While the MMR remains our foundational anchor, we are systematically mitigating geographical concentration risk through a disciplined expansion into Pune and Bengaluru, where we now have 10 and 4 active locations respectively, alongside our entry into the NCR via 2 newly secured locations in Gurugram. This multi-city framework fundamentally diversifies our addressable consumer demographic by capturing distinct macroeconomic engines, ranging from the corporate headquarters, BFSI and large SME sectors in MMR, to manufacturing, defence and automotive industries in Pune, high-end IT services and GCCs in Bengaluru and professional business services, healthcare and startups in the NCR. To complement this geographic spread, we are concurrently scaling our high-yielding annuity business verticals to generate a sizeable, predictable recurring revenue stream, ensuring that while residential development remains our core focus, our portfolio is sufficiently de-risked and structurally insulated from localised market volatility.

Cyclicality of the Residential Real Estate Industry Risk Profile

The real estate industry is inherently cyclical, susceptible to shifting macroeconomic variables, evolving regulatory frameworks and fluctuating supply-demand dynamics. The Indian housing sector is currently in the fourth or fifth year of a robust, multi-year upcycle; however, any near-term moderation or temporary plateau in this cycle could compress industry-wide transaction velocities and temporarily impact overall operational momentum.

Mitigation Strategy

Indias housing sector has reached a pivotal inflection point, propelled by the transition from a low-income to a middle-income While near-term cyclical downturns are inevitable, we manage this volatility through a disciplined and resilient balance sheet, viewing operational growth as an outcome of prudent capital allocation. Our long-term strategic target of a ~20% PAT CAGR is anchored within a conservative leverage framework, governed by an institutional ceiling of 0.5x net debt-to-equity. Having already achieved this threshold, we remain committed to maintaining leverage well below this cap.

In tandem with this balance sheet discipline, we are building a substantial annuity income pool over the next six years, with the objective of scaling our recurring revenue streams ten-fold by FY32. This expansion will be driven by scaling up our data centre business, alongside the execution of our existing growth pipelines across the warehousing, industrial and retail segments. This annuity scale-up will be managed with disciplined financial management, funded entirely by internal accruals.

This financial discipline coupled with strong scale up of our annuity income, positions us not only to withstand cyclical downturns but also to proactively capitalise on attractive opportunities that may emerge during weaker phases of the housing cycle.

Economic Slowdown Risk Profile

Sustainable job creation, which is fundamentally linked to the health of the economy, serves as the primary engine of housing demand in India. Any material deterioration in job sentiments, whether driven by job losses or reduced rate of new job creation or stagnant wage growth could lead to slowdown in housing demand.

Mitigation Strategy

The underlying structural drivers of the Indian economy remain exceptionally robust, with RBI forecasting a GDP growth rate of 6.6% for FY27, positioning the nation to sustain its trajectory as the worlds fastest-growing major economy. While there may be cautiousness in the IT sector, particularly in light of AI led disruptions, GCCs continue to demonstrate healthy recruitment velocities and office leasing activity, with CY25 recording the highest ever office absorption. To insulate our sales momentum from broader economic fluctuations, we maintain a highly responsive, data-driven framework that keeps us attuned to evolving trends in the economy and the industry. Leveraging this agility, we retain absolute operational flexibility to recalibrate our product segment and the timing and sizing of our launches. This adaptive approach ensures we can rapidly realign our offering with shifting market realities, substantially mitigating the impact of any broader macroeconomic deceleration.

Climate Risk Risk Profile

Climate risk has emerged as a critical, multi-dimensional challenge for the real estate industry, as the tangible impact of global climate change manifest through rising sea levels, increased volatility in ambient temperatures and an escalating frequency of extreme weather events. Left unmitigated, these environmental shifts present long-term structural risks to asset durability, construction supply chains, and localised urban habitability.

Mitigation Strategy

As a leader in the real estate sector, we recognise our responsibility to spearhead solutions that address the challenges posed by climate change. With climate risk becoming increasingly critical, we are committed to assuming global leadership by implementing best-in-class environmental practices to mitigate these risks. Our approach of building climate resilience in tandem with decarbonisation enables us to decouple growth from emissions. We have consistently been ranked among the top performers globally by various benchmarking institutions for our efforts in this regard. Our sustainable design practices integrate passive design and equipment efficiency, driving significant reductions in greenhouse gas emissions and lowering operating costs. We are also increasing the use of low-carbon, sustainable materials, thereby driving down the embodied carbon footprint across our built environment. Validating the rigour of these initiatives, we stand as Indias first real estate company to have its emission reduction goals validated by the SBTi. Our commitment to sustainability and our focus on decarbonisation and resilience demonstrate our dedication to creating a more sustainable and profitable future for us and the real estate industry as a whole.

Outlook

Structural demand drivers and favourable industry dynamics are projected to sustain robust housing demand over the medium to long term. Housing remains a fundamental household necessity. When supported by high-quality supply and accessible price points, this underlying need consistently translates into tangible pre-sales. As developers continue to align product offerings with evolving consumer preferences, this latent demand is poised to steadily convert into realised demand over the medium to long term.

Indias broader macroeconomic growth narrative remains firmly intact, underpinned by progressive policy reforms, a strong push toward manufacturing, and the continued diversification of global supply chains. In parallel, a resilient services sector continues to drive white-collar employment generation at scale. As income levels rise and job security improves, consumer confidence remains strong, with home ownership increasingly perceived as both, an inflation-hedging financial asset and a vital source of long-term security.

Furthermore, a supportive policy environment, characterised by calibrated interest rate cuts and targeted tax incentives,is expected to provide further stimulus to demand, particularly within the affordable and mid-income segments, together, creating a conducive ecosystem for sustained growth in the housing sector, enabling consistent demand absorption across cycles.

The accelerating industry consolidation, both on the supply and the demand sides allows branded developers to benefit disproportionately. With robust brand, strong balance sheet and execution capability, we are well positioned to deliver a consistent 20% profit CAGR over the long term, while maintaining low debt leverage. The industry tailwinds will further solidify our growth trajectory, with launch of new projects in newer micro-markets of MMR, Pune and Bengaluru. While residential real estate remains our primary growth engine, we will continue to invest in building up our annuity income streams, with the objective of de-risking the development business from market cyclicality. We project a tenfold expansion of our recurring annuity income portfolio over the next six years. A large part of future growth in annuity business will be derived from BTS powered shell data centres at Palava. We view Palava as the premier data centre location in the country, boasting access to contiguous and expandable land supply, abundant power infrastructure, water lines and dense optical fibre cable connectivity. Funded dynamically through parallel land sales, this self-financing vertical will deliver non-dilutive value creation for our stakeholders.

Internal Control Framework

The Company maintains a robust internal financial control architecture, commensurate with the size, scale and operational complexity of its operations. This integrated system encompasses comprehensive procedures, adequacy testing protocols and formalised policies engineered to secure the orderly and capital-efficient conduct of business, strict adherence to established corporate mandates, the safeguarding of institutional assets and the integrity of financial reporting. Governed under a disciplined Tone at the Top framework, the design of key processes undergoes continuous lifecycle reviews to ensure alignment with evolving legislative changes and global benchmarks.

Operational oversight is driven by the Companys internal audit function, overseen by the Chief Internal Auditor. The annual internal audit plan is reviewed and approved by the Audit Committee at the commencement of each financial year. To ensure rigorous execution, the Management Audit Committee, chaired by the MD and co-chaired by the CFO, reviews detailed internal audit reports prior to their quarterly presentation to the Audit Committee. Functional heads participate in these meetings as necessary to provide updates on control and compliance developments within their respective domains.

The Internal Audit team conducts effectiveness testing of internal controls across all project sites and functions. The findings of these tests, along with any recommended corrective actions, are reviewed by management on a regular basis. Any deviations identified are reported to the Audit Committee periodically.

A certificate from the CEO and CFO, confirming effectiveness of internal controls and reiterating their responsibility to report deficiencies to the Audit Committee and rectify the same, forms part of the Corporate Governance Report.

Environmental Health and Safety (EHS) Framework

Safety represents the fundamental expression of our operational integrity. We are committed to the health, safety and workplace dignity of our associates and all site partners, as outlined in our comprehensive EHS Policy. To institutionalise a First-Time Right safety culture where operational excellence and risk mitigation are structurally linked, we operate under a robust health and safety management framework rigorously certified to international ISO 45001:2018 and ISO 14001:2015 standards. Our safety architecture drives leadership accountability, continuous learning and digital transparency across all project tiers to advance our Everyone Goes Home Safe vision. Project-level governance is managed via site-specific EHS Committees that facilitate direct consultation between management, staff and workers through weekly safety walkabouts and monthly performance reviews against established KPIs. Our teams systematically utilise predictive leading indicators, real-time hazard tracking and regular internal audits to maintain strict statutory compliance and ensure continual process optimisation.

Further details are provided in the EHS section and other parts of this Integrated Report

Human Resources

Our people strategy is anchored in the fundamental conviction that a high-performing, engaged, and purpose-driven workforce is the primary catalyst for sustainable corporate growth. Aligned with our Employee Value Proposition, Build the Best. Be the Best, we focus on institutionalising capability building, fostering a strong culture of ownership and recognition. This framework is operationalised through specialised technical and behavioural capability centers alongside other leadership development programmes. Attracting top-tier talent through a strictly meritocratic framework, our headcount increased to 5,700+ in FY26. Our sustained commitment to cultivating an equitable, high-trust, and people-first culture has been validated by national recognition as a Great Place to Work for the third consecutive year.

Further details are provided in the People Section which forms part of this Integrated Report.