Man Infraconstruction Ltd Management Discussions.

Indian Economy:

The Indian economy returned to growth in the October- December quarter of FY21, according to data by the National Statistics Office (NSO) after recording two consecutive quarters of de-growth that was caused by the COVID-19 lockdown. Gross domestic product (GDP) growth for Q3 FY21 came in at 0.4%, compared to de-growth of 7.3% reported for Q2 FY21. This growth was mainly on account of resumption in economic activity, festival spending, pent-up demand and an increase in Government expenditure. According to the second advance estimates of National Income, financial year 2020-21 is expected to suffer a GDP contraction of 8% as compared to a growth of 4% in 2019-20.

Source: Central Statistics Office (CSO)

The Government of India announced a special economic and comprehensive package under Atma Nirbhar Bharat including measures taken by RBI amounting to about Rs. 27.1 lakh crore - to combat the impact of the COVID-19 pandemic and to revive economic growth. The package included, among others, in-kind and cash transfer relief measures for households, employment provision measures under Pradhan Mantri Garib Kalyan Rojgar Abhiyaan and increased allocation under MGNREGS, credit guarantee and equity infusion-based relief measures for MSMEs and NBFCs and regulatory and compliance measures. Working capital term loans secured by Covid-hit micro, small, and medium enterprises (MSMEs) under the Rs. 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) provided interim liquidity support and helped the beneficiaries in meeting their operational liabilities. The Union Budget 2021-22 also announced a number of measures to support broad-based and inclusive economic development.

Amid the green shoots of economic revival, the country is facing a second wave of COVID-19 infections. The spread of the virus has caused actions by state governments which have ranged from night curfews and weekend lockdowns to full lockdowns. The curve of COVID-19 cases and mobility trends will have a direct bearing on the level of economic activity. However it is expected that the pace of new infections will slow down as vaccinations pick up. The Centre has stepped up the vaccination drive by allowing the vaccination for all those persons above the age of 18 from May 1.

It is likely that the first quarter of fiscal year 2021-22 will have to bear the adverse economic effect of the sharp spike in COVID-19 infections. However, once the second wave subsides and a larger proportion of the population is vaccinated, pent-up services demand is likely to push GDP growth back up in second half of fiscal year 2021-22.

As per World Banks Global Economic Prospects (GEP) report released in January 2021, Indias gross domestic product (GDP) is projected to grow by 5.4% in 2021-22 and 5.2% in 2022-23.

Infrastructure and Construction:

Union Finance Minister Nirmala Sitharaman proposed a capital expenditure of Rs. 5.54 lakh crore for the Infrastructure sector in the Union Budget 2021-22, 34.5% higher than the budget outlay of Rs. 4.12 lakh crore in 2020-21. The minister also announced the creation of a new infrastructure focused development finance institution (DFI) - National Bank for Financing Infrastructure and Development (NBFID) which will act as a provider, enabler and catalyst for infrastructure financing with an initial capital base of Rs. 20,000 crore and a planned lending target of Rs. 5 trillion in three years. The National Bank for Financing Infrastructure and Development Bill, 2021 was introduced in Lok Sabha on March 22, 2021. NBFID will directly or indirectly lend, invest, or attract investments for infrastructure projects located entirely or partly in India. It will also facilitate the development of the market for bonds, loans, and derivatives for infrastructure financing. The DFI will ensure steady flow of funds to infrastructure projects and will also finance projects in the National Infrastructure Pipeline (NIP).

As part of the NIP, the Union government plans to invest Rs. 111 trillion in 7,671 infrastructure projects till 2024. The investments planned under the National Infrastructure Pipeline (NIP) will be key growth drivers for the construction sector. More than 13,000 km length of roads, at a cost of Rs. 3.3 lakh crore, has already been awarded under the Bharatmala Pariyojana project of which 3,800 km have been constructed. By March 2022, another 8,500 km of national highway corridors will be awarded.

Sector-wise break-up of capital expenditure of Rs 111 lakh crore during fiscals 2020-2025 under The National Infrastructure pipeline (Nip)

The execution was severely impacted in H1FY2021 due to the nationwide lockdown, reverse migration of labour and supply- chain constraints. However, in the last few months, the Centre has announced a slew of relief measures to support players, including relaxation on EMD (earnest money deposit) and performance security, relaxation of bidding eligibility criterion and increased frequency of payments for government tenders. In November 2020, the Government approved an equity infusion of Rs. 6,000 crore in National Investment and Infrastructure Funds (NIIF) debt platform over two years to drive infrastructure creation in the country. The Finance Minister also announced an additional outlay of Rs. 18,000 crore for the urban housing scheme to help complete real estate projects that would create jobs and boost the economy. The construction sector grew by 6.2% in the third quarter of FY21, Showing improvement from the negative growth of 49.4% and 7.2% in the preceding two quarters.

With the government focusing on infrastructure to drive economic growth, the construction industry is likely to see significant opportunities in the medium term and expected to rebound in fiscal year 2021-22.

Port infrastructure

The volume of cargo traffic handled at the government-run Indian ports has witnessed a decline in the current financial year, owing to the disruption brought about by the pandemic. Indias 12 major ports witnessed a 4.5% fall in cargo handling to 672.60 million tonnes (MT) in FY21 (April20 - March21) compared to a growth of 0.8% achieved in FY20 (AprilRs. 19-March20). Following eight months of sequential improvement, the major ports witnessed a contraction in traffiic volumes from Februar/21 attributed to renewed restrictions amid the surge in COVID-19 infections worldwide.

Source: Indian Ports Association (IPA)

As per Union Budget 2020-21, a total of Rs. 1,700 crore has been allocated for the Ministry of Ports, Shipping and Waterways. The Finance Minister also announced privatization of the operations of seven major ports worth Rs. 2,000 crore in FY21-22. The 2nd Maritime India Summit organised by the Ministry of Ports, Shipping and Waterways in March 2021 emphasized on Indias ambition to emerge as a leading Blue Economy of the world by growing its Maritime sector.

The Government aims to operationalize 23 waterways by 2030. It is also taking steps to introduce urban water transport systems in key states and cities such as Kochi, Mumbai, Gujarat and Goa. A program for developing tourism in the land adjacent to 78 lighthouses across the country has been outlined. The Ministry of Port Shipping and Waterways has created a list of 400 investable projects. These projects have an investment potential of Rs. 2.25 lakh crore. Through the focus areas of upgradation of infrastructure, boosting reform journey, India aims to strengthen the vision of Aatmanirbhar Bharat.

The Sagarmala project for promoting port led development was announced by the Government in 2016. As part of the Programme, more than 574 projects at a cost of Rs. 6 lakh crore have been identified for implementation during 2015 to 2035.

The improvement in the port sector would be dependent on the pace and extent of the economic recovery, domestically and globally. Nevertheless, there is growing optimism about the strengthening of the global economy with the roll-out of the vaccines that is expected to lead to a rise in trade across economies and thereby cargo traffic at ports. Various Government initiatives and increasing investment point towards a healthy outlook for the Indian ports sector.

Residential Real Estate :

The Indian residential real estate situation started normalizing post lockdown and there was a rapid surge in demand for housing during the second half of year 2020. Residential real estate across top seven property markets of the country staged an impressive comeback with a surge in housing sales breaching the prepandemic level driven by record-low interest rates, discounts offered by developers, eased property prices and stamp duty reduction in key markets.

Source: Anarock Research

Maharashtra became the first state to reduce the stamp duty from 5% to 2% until 31st December 2020 and 3% from 1st January 2021 to 31st March 2021. As many as 58,290 homes were sold in the top 7 cities in Q1 2021 in comparison to 45,200 units in Q1 2020 - effectively breaching pre-COVID levels. MMR and Pune together accounted for 53% of housing sales in the quarter - MMR sales increasing by 46% annually, and Pune by 47%.

City-wise Sales in Top 7 Cities (Jan - March)

Cities Name Q1 2021 Q12020 % Change (Q1 2020 vs Q1 2021)
NCR 8,790 8,150 8%
MMR 20,350 13,910 46%
Bangalore 8,670 8,630 0%
Pune 10,550 7,200 47%
Hyderabad 4,400 2,680 64%
Chennai 2,850 2,190 30%
Kolkata 2,680 2,440 10%
total 58,290 45,200 29%

Source: Anarock Research

This crisis has definitely led people to rethink on the idea of owning a house which is set to bring out changes in the industry trends. The biggest learning is the change in perception of owning ones house which embeds a deep sense of safety and security in the period of crisis. With continued Work From Home (WFH) and online schooling, people are now eyeing larger homes or functional and flexible homes that can accommodate working spaces.

The Union Budget 2021 announced some measures to boost the Real Estate Sector. Some of the measures announced for the Real Estate sector are as under:

• Extension of tax holiday for affordable housing projects which are approved up to 31st March, 2022

• Extension of period for availing additional interest deduction of Rs 1.5 lakh for loans taken up to 31st March, 2022

• Enabling debt fiinancing by FPI for REITs; nil withholding tax on dividends paid to REITs

Indias improved rank on Ease ofDoing Business and implementation of reforms such as Demonetization, RERA, and GST have helped in establishing Indian real estate as a preferred investment for global investors. Despite Covid-19, Mindspace Business Parks REIT, jointly owned by K. Raheja group and Blackstone, launched its Rs 4,500-crore initial public offering (IPO) in August 2020 which was subscribed by over 13 times. This positive response to the REIT will help build further confidence amongst global investors and attract them for long term commitment to the market.

The onset of the second wave of the pandemic has influenced the future sentiments of the real estate in the country. The shortterm growth in real estate will depend primarily on the intensity and duration of the current wave in our country and the pace of vaccination. Backed by positive economic fundamentals, healthy demand and quality supply infusion across sectors, Indias real estate sector is prepared for robust growth in the long-term.

Operational Review:

Man Infraconstruction Ltd. (Man Infra) has two business verticals viz., Construction and Real Estate Development. Man Infra is an integrated EPC (Engineering, Procurement and Construction) company with five decades of experience and execution capabilities in Port, Residential, Commercial & Industrial and Road construction segments with projects spanning across India. As a Real Estate Developer, Man Infra has delivered 7 Residential projects in Mumbai and is recognized for its superior quality construction and timely project delivery. The Company has extensive experience in construction management and has inherent skills and resources to develop and deliver Real estate projects.

As Maharashtra faced the second wave of Covid 19, the State Government imposed a lockdown in the State with certain guidelines and restrictions. The construction sites were allowed to operate with some restrictions and precautions. Accordingly the Company continued the construction work at all sites observing the guidelines laid down by the State Government. The company made all arrangements to ensure safety and health of the workers and employees working on site or office.


During the year, Man Infra received construction work orders worth Rs. 168.13 crore across Residential and Infrastructure segments.

The total outstanding EPC order book stands at Rs. 762.15 crore as on March 31, 2021. Out of the total order book, 65% was contributed by Residential segment, 34% was contributed by Infrastructure Segment and balance 1% was contributed by Commercial Buildings segment.

Going ahead, the Company will continue to explore opportunities to add prudent EPC projects to its order book.

Real Estate -

The current portfolio of the Group includes 5 residential development projects/phases (ongoing) in Mumbai/MMR region.

Aaradhya Oneearth - MHADA Redevelopment project which is being developed by Man Realtors and Holdings Pvt. Ltd. (where Man Infra holds 62.79%) in Ghatkopar East, Mumbai was launched in September 2020. The Residential cum Commercial project comprising of 7 Residential and 2 Commercial Buildings was planned to be developed in 3 phases. However, subsequent to an overwhelming response received during the launch of Phase 1 (4 towers), 3 more towers were launched. As on 31st March, 2021 approximately 81% of total inventory of 7 towers has been sold. The revenue recognition for this project will start in financial year 2021-22.

The phase 2 of project Atmosphere is being developed by Atmosphere Realty Pvt. Ltd. (where Man Infra holds 17.50% stake) in joint venture with The Wadhwa Group and Chandak Developers. The project consists of 3 residential towers of 47 storey each and 1 commercial tower of 18 storey. The total RERA carpet area of the project is 7.15 Lakh Sq.ft. approximately. The construction work for both residential and commercial buildings is progressing as per schedule. As on 31st March, 2021, approximately 39% of total inventory has been sold in Phase 2.

The construction work for project aaradhya eastwind which is being developed by MICL Developers LLP (where Man Infra holds 99.99% stake) is going on as per schedule. The project is expected to get completed by September 2022. As on 31st March, 2021, approximately 57% of total inventory has been sold.

The construction work for 4 towers from total 6 towers of Phase 1 of the Project Aaradhya Highpark near Dahisar, Thane is progressing as per schedule. Approximately 91% inventory of total 4 Towers has been sold as on 31st March, 2021. The remaining 2 towers will be launched in financial year 2021-22.

During the year, Man Chandak Developers LLP (where Man Infra holds 50%) in association with Shreepati Rise LLP launched a premium Residential project insignia, at Vile Parle West, Mumbai, in revenue sharing model. The project is being developed in phases and the construction work for Phase 1 having a RERA carpet area of approximately 36,500 sq.ft. is going on in full swing.

We shall continue to explore new opportunities in real estate in and around Mumbai. Currently, the Company is evaluating a few proposals and is looking forward to add some value-accretive projects to its portfolio in financial year 2021-22.

Financial Performance:

Consolidated Standalone
Particulars FY 202021 FY 201920


FY 202021 FY 201920


Rs. In Lakhs


Rs. In Lakhs %
Total Revenue 42,715.86 26,697.83


11,960.53 10,697.53


Total Income 45,200.87 29,418.73


23,336.67 20,329.93


Profit before tax 5,511.02 (3,438.66)


10,980.96 8,857.96


Profit after tax 3,201.53 (712.47)


9,241.99 6,872.60


As on March 31, 2021, the holding company Man Infra has a Cash & cash equivalent of Rs. 19,161.13 Lakhs and Networth of Rs. 93,065.38 Lakhs.

The standalone revenue from operations for FY20-21 at Rs. 10,697.53 Lakhs was higher than previous year by 11.8% on account of execution of orders in hand and new orders received during the year.

The consolidated revenue from operations for FY20-21 at Rs. 42,715.86 Lakhs was higher than previous year by 60.0% on account of increase in both revenue from construction contracts and Real estate development projects.

On standalone basis, the Company reported a profit of Rs. 9,241.99 Lakhs for FY20-21, higher by 34.5% compared to previous year. The increase in profitability has been primarily due to increase in revenues and increase in other income compared to previous year.

On consolidated basis, the company reported a profit of Rs. 3,201.53 Lakhs for FY20-21 compared to a loss of Rs. 712.47 Lakhs in the previous year. The increase in profitability was on account of the contribution from the real estate subsidiaries that started recognizing revenue as well as due to increase in profitability in the standalone company.

Risk Management:

The Company works in an environment which is affected by various factors, some of which are controllable while some are outside the control of the Company. At Man Infra, we have developed a robust risk management framework that reduces the volatility due to unfavorable internal and external events, facilitates risk assessment and mitigation procedure, lays down reporting procedure and enables timely reviews by the management. The following section discusses some of these risks and steps taken by Man Infra to mitigate such risks.

1. Economic Risk

a. Risk: An unexpected development in any of the macroeconomic variables that may adversely impact the Companys profitability or viability. Both Infrastructure and Real estate are cyclical industry and they get impacted more by the changes in macroeconomic variables like interest rate, GDP Growth, purchasing power, inflation, among others.

b. Mitigation Plan: Man Infra continues to be conservative and follows well defined internal prudential norms. The Company has attempted to hedge against the inherent risks of Real Estate business by following joint development model. It maintains a low debt equity ratio, adequate liquidity and strong clientele with broadly timely payment track-record which helps in minimizing the impact of any downturn in economy.

2. Policy Risk

a. Risk: Maharashtra finalized the rules under the Real Estate Regulation and Development Act (RERA), 2016; its Housing Regulatory Authority has started operating from May 1, 2017. The Authority has been setup to bring in more transparency and accountability from developers, protect the interests of the buyer and also penalize the non-compliant builders. RERA seeks to address issues like delays, price, quality of construction and title among others.

Any such non-compliance with RERA regulations or delay in project delivery may result in cost overruns and impact the Companys operations unfavorably.

b. Mitigation Plan: Man Infra has put in place processes that include milestone based time & quality checks that help to ensure adherence to quality, cost and delivery as per the plan. All the ongoing projects of the Group are registered under RERA. The Company maintains financial discipline with regards to the investment and subsequent cash flow generation from a project. The Company has a past track record of delivering the projects before time and maintaining high quality standards.

3. Execution Risk

a. Risk: Real Estate and construction projects are subject to various execution risks like regulatory hurdles, delay in receipt of approvals, availability of labour and raw material, etc. Any such delay may result in cost overruns and impact the Companys operations unfavorably.

b. Mitigation Plan: The Company deploys a well-defined standard operating procedure - from project planning to delivery - and adheres to internal checks and balances with regard to every project. Extensive diligence is carried out before entering into partnerships for joint development.

4. Liquidity risk

a. Risk: The Real estate business has significant initial outflow with staggered and long-term inflows. As per RERA, the developer is required to set aside 70% of the funds received for a particular project, in a dedicated escrow (bank) account and can only be used for construction activities. Delays in project cycle; inadequate funding resources may have an impact on the liquidity position of the Company.

b. Mitigation Plan: The Company maintains financial discipline with regards to the investment and subsequent cash flow generation from a project. Moreover, the Company has also been taking adequate measures to manage working capital cycles like monitoring and closely following up with debtors. For the EPC business, the Company also receives mobilization advances, which aids liquidity management. On the consolidated level, the Groups balance sheet is low geared with a Debt:Equity ratio of 0.68x as on March 31, 2021.

5. input price risk

a. Risk: The Groups Real estate operations as well as EPC contracts are subject to cost overruns due to increase in material cost or labour cost. The Companys earnings may be affected from the volatility in the price of input.

b. Mitigation Plan: For EPC projects, Man Infra has a price escalation clause where the increase in the input cost is directly passed to the client. For development projects, Man Infra takes this risk into account at the time of launch. Also, the Company usually sells the projects in a phased manner which aids in covering the rise in cost of construction in subsequent sale.

6. Sales Volume

a. Risk: The performance of the Company may be affected if there is substantial difference between the estimated and actual sales volume of the Real Estate development projects.

b. Mitigation: The volume of sales in the Real Estate business depends on the nature and location of the project, design & layout and the reputation of the developer. Man Infra strives to build a worthy reputation in the industry by delivering superior quality product and maintaining long-binding relationships with all its clients and stakeholders. The Company constantly focuses on deploying latest technologies for projects and cost effective measures to enhance operational efficiency resulting in timely delivery. Man Infra also strives to offer distinctive features in its projects to stand out from competition. During COVID times, the Company has worked on its digital marketing strategy so as to give customers real experiences and aid decision making when they cannot visit the site in person.

Human Resources

The Company believes that its capability to preserve and continue its growth depends largely on its strength of developing, motivating and retaining talent. It firmly believes that highly motivated and empowered employees are its best assets to maintain a competitive edge in the market. The management is committed to continuously upgrading skills and competency at all levels with the aid of extensive training. The Company is committed to ensure employees safe working conditions and social awareness. We have added about 100 employees on our payroll in last one year. As on 31st March, 2021, Man Group has a team of more than 535 employees on payroll.

The Companys employees possess requisite qualifiications and technical expertise to execute projects across the Real Estate and construction services domain. The Companys HR continues to focus on maintaining excellent work culture, employee development and competitive compensation to ensure a motivated and empowered workforce.

Internal Control Systems

The Company has an adequate internal control system to safeguard all assets and ensure their efficient productivity. The Company practices quality management system for design, planning and construction that complies with International quality standards. The Company has a suitable internal control system for the business processes, operations, financial reporting, compliance with applicable laws and regulations. Enterprise Resource Planning Software is in implementation for Head Office and most of the Sites. The Internal Audit firm conducts periodical audits to ensure adequacy of internal control systems and adherence to management policies. Wherever deemed necessary, internal control systems are also reassessed and corrective action is taken, if required.

Cautionary Statement

This management discussion and analysis may contain forward looking statements that reflects your Companys performance with respect to future events. The actual results may differ materially from those anticipated in the forward looking statements as a result of many factors.