Man Infraconstruction Ltd Management Discussions

Global Economic Overview:

The global economy experienced signs of stabilization in much of 2024 and early 2025 with global inflation easing from over 8% in 2022 to central bank targets of ~ 4-4.5% and global GDP growth holding near 3%. However, the announcement of U.S. tariffs in early 2025 followed by retaliatory measures from key trading partners (countries) has had a negative impact on economic activity. These actions have disrupted global trade flows and introduced renewed policy-driven uncertainties, leading to a notable pullback in investor sentiment. As a result, the IMF has revised its global growth forecasts downward to 2.8% for 2025 (from 3.3% projected in January) and to 3.0% for 2026.

Amid a lack of structural reform momentum and ongoing headwinds from a range of challenges, global economic performance is expected to remain mediocre as per World Economic outlook report published in April-2025 by International Monetary Fund (IMF).

Indian Economic Outlook:

Indias GDP is projected to grow at 6.5% in FY 2024–25, according to the Provisional Estimates of Annual GDP, maintaining its position as the fastest-growing major economy globally. Deloitte projects growth to remain strong at 6.5–6.7% in FY 2025–26, supported by resilient domestic demand, higher government spending, and continued strength in the services and construction sectors.

Private consumption continues to be a key pillar of growth. To stimulate demand across rural and urban India, the Union Budget FY26 introduced targeted tax reliefs for individuals, which are expected to further boost consumption in FY26 potentially adding 0.6–0.7 percentage points to GDP growth (Deloitte India Economic Outlook, May 2025).

Indias economic resilience in FY25 is reflected in strong macro-financial indicators. GST collections grew 9.4% YoY in FY25, averaging Rs.1.74 lakh crore monthly, while foreign exchange reserves reached a record $685 billion as on May 2025. The Financial Stability Report (June 2025) by RBI highlights the banking sector saw gross NPAs drop to ~3% and credit growth remained at ~15% YoY. Fiscal deficit was contained at 5.1% of GDP, and direct tax collections rose ~17% YoY. Both manufacturing and services PMIs published by S&P Global, stayed above 55 throughout FY25, indicating sustained expansion. CPI Inflation also eased to 3.16% in April 2025 it is lowest in six years allowing the RBI to cut the repo rate by 100 basis points over the year, bringing it to 5.50%. Additionally, 100 bps cut in CRR to 3.00% will further improve liquidity and credit flow across sectors. This shall improve the home loan a_ordability of the buyers in the real estate sector and shall also help the developers access more capital for ongoing projects to meet project timelines.

Despite global uncertainties, Indias economic outlook remains positive, supported by macroeconomic stability, policy continuity, and a strong domestic growth engine.

Infrastructure-Led Growth Strategy

In its 8th Budget, the government presented a strategic vision to accelerate Indias economic growth, with a strong emphasis on infrastructure as the cornerstone for achieving the Viksit Bharat @2047 goal.

Aligned with this vision, the governments continued commitment to infrastructure is reflected in an enhanced capital outlay of Rs.11.21 lakh crore, building on the previous years Rs.11.11 lakh crore. A new Asset Monetization Plan is being introduced to unlock value from public assets, supported by a three-year pipeline of Public-Private Partnership (PPP) projects aimed at boosting private sector participation.

Advancing the theme of inclusive growth and improved connectivity, the UDAN – Regional Connectivity Scheme is set to transform regional air travel by adding 120 new destinations and targeting 4 crore passengers over the next decade. To strengthen Indias maritime capabilities, the government has proposed the creation of a Maritime Development Fund (MDF) with an initial corpus of Rs.25,000 crore. The fund will support ship acquisition and aims to raise the share of Indian-flagged ships in global cargo to 20% by 2047. By 2030, the MDF is expected to catalyse up to Rs.1.5 lakh crore in investments in the shipping sector.

Additionally, the extension of the PM Gati Shakti portal to private players will enhance multimodal logistics planning, improving both efficiency and cost-e_ectiveness in cargo movement.

Together, these initiatives alongside broader policy and tax measures highlight the governments integrated and forward-looking approach to strengthening Indias infrastructure and advancing its long-term development agenda.

Construction Sector: Growth Trends & Outlook

Indias construction sector has demonstrated consistent expansion over the past five years, growing from Rs.9.83 lakh crore in FY 2020–21 to an estimated Rs.15.72 lakh crore in FY 2024–25 according to provisional estimates of annual GDP. This reflects a compound annual growth rate (CAGR) of 12.4%.

This growth is supported by strong public infrastructure spending and demand in urban development. The sector continues to benefit from targeted policy support, increased capital expenditure, and strategic initiatives under programs such as PM Gati Shakti and Smart Cities Mission.

Residential Real Estate Performance:

Indias residential market entered a stabilization phase in 2024, following the exceptional growth of 2023. As per ANAROCK Research, new launches declined by 7% to 4.13 lakh units across the top 7 cities, primarily due to approval delays around general elections.

Source: Anarock

Despite the dip in supply, housing sales remained steady, down just 2% at 4.60 lakh units, compared to 4.77 lakh units in 2023. However, the total transaction value rose by 16% to INR 5.68 lakh crore, indicating a clear shift toward premium and luxury housing.

Prices also surged across markets in 2024 and even in Q1-2025, driven by rising input costs and healthy demand. Notably, homes priced above INR 2.5 crore saw a 66% jump in new supply, with strong absorption in MMR, NCR, and Bengaluru, highlighting the sustained momentum in the high-end segment.

Outlook

According to an Anarock report, Indias residential real estate market is set for moderate but steady growth in 2025, supported by end-user demand driven by first-time homeownership and the need for larger living spaces, alongside improved a_ordability.

A trend that emerged a few years ago, demand for high-end and premium homes with modern amenities, has given rise to the luxury housing segment, which will continue to gain prominence, fueled by a growing base of young HNIs and ultra-HNIs.

A strong launch pipeline is also likely to boost supply, keeping the market responsive to evolving preferences. The combination of demand resilience, luxury uptake, and new launches points to a stable and evolving market in year ahead.

Company Review:

Man Infraconstruction Ltd. (Man Infra, MICL) has an experience of over five decades, in the construction industry. With 60 years of experience, in EPC (Engineering, Procurement, and Construction) business, we have delivered ambitious projects across ports, residential, commercial, industrial, and road construction sectors throughout India. As a distinguished real estate developer with asset light approach and focus in Mumbai market, Man Infra has earned accolades for its superior quality and punctual delivery. The companys vast expertise in construction management, combined with its robust skills and resources, ensures the successful development and execution of real estate projects.

Real Estate Introduction

MICL has established a formidable presence in the real estate sector over the past decade, building a reputable brand, ‘Aaradhya, synonymous with trust and quality. The company has strategically adopted an asset-light approach to expand its real estate business through Joint Development Agreements (JDAs), Joint Ventures (JVs), and the Development Marketing (DM) model, minimizing initial investments.

MICL has carved out a niche in the redevelopment space, undertaking projects for private societies, cluster redevelopment, MHADA, and SRA. The Groups portfolio, encompassing 4.8 million sq. ft. of carpet area of ongoing and upcoming projects, primarily spans the Mumbai Metropolitan Region (MMR) and caters to mid to luxury and ultra luxury segments. With a diverse presence ranging from the prestigious market of Tardeo and Marine Lines in South Mumbai to Mira Bhayandar and other prime suburbs including BKC, Pali Hill, Juhu, Vile Parle, Goregaon, Mulund & Ghatkopar, MICL continues to set new standards in urban redevelopment and real estate excellence.

Strengths

• Growth through asset light model and leverage partners capabilities for growth

• Capitalizing on Man Infras execution capabilities

• Maintain Project Discipline & tight project monitoring

• Focus on Cash Flow management to manage project risks

Operational Performance

Significant Progress across Parameters

During fiscal 2025, MICL demonstrated remarkable progress in its real estate business across all parameters.

1. Surge in sales and collection

We recorded annual sales worth Rs.2,251 Cr. in FY25 a sharp threefold surge over Rs. 744 Cr. in the previous year. This was backed by sale of 7.8 lakh sq. ft. of carpet area in FY25 compared to Rs.3.0 lakh sq. ft. in FY24. Such record performance was driven by new launches and also from recently delivered projects. The collections also increased to Rs.1,270 Cr. up from Rs.1,197 Cr. in FY24

2. New Launches

In FY25, company launched 5.7 lakh sq. ft. of carpet area with total sales potential of Rs.1,600 cr. It launched ‘JadePark in Vile Parle having 3.5 lakh sq. ft. of carpet area and it is the 1st and one of the largest clusters in the micro-market. We also launched balance two sale towers of Aaradhya Parkwood comprising 2.3 lakh sq. ft. of carpet area. Both the projects launched around January 2025 had an overwhelming sales response achieving nearly 45% of total sales potential in 4 – 5 months since launch.

3. Strong Delivery

MICL continue to focus on timely delivery of all its projects. The company delivered 3 projects measuring 4.2 lakh sq. ft. of carpet area in FY25. It secured Occupancy Certificate (OC) of Tower F of ‘Atmosphere O2 and ‘Gateway (the commercial tower) both located at Nahur in Mulund West. It also secured OC and handed over the delivery of its luxury project Aaradhya Evoq in Juhu. All these projects were delivered in a record span of less than 3 - 3.5 years from launch. While the project at Juhu is fully sold out, the Atmosphere O2 project is also nearly 100% sold out.

Long Term outlook

• Continue to explore opportunities in redevelopment space in Mumbai real estate market across Own /JV/DM model

• Strong revenue visibility from the upcoming projects and from projects in pipeline

EPC Introduction

Man Infras EPC division, has delivered over 50 million sq. ft. of construction across India. This division earns income from infrastructure projects such as ports, institutional buildings, government residential projects, and its own residential developments. Additionally, it has the potential to generate income through PMC (Project Management Consultancy) fees for professional management of its own real estate projects.

Strengths

• Commitment to Quality and Timely Delivery: This dedication results in repeat business from satisfied clients

• Efficient Project Monitoring and Cost Control: Ensures projects stay on schedule and within budget.

• Experience in Complex Projects: Extensive expertise in constructing complex infrastructure projects, high-rise buildings, townships, and mass housing developments.

Operational Performance

As of March 31, 2025, Companys EPC order book stands at Rs.503 crore, with infrastructure projects contributing 74% and the residential segment accounting for the remaining 26%. In addition, Man Infra is constructing one of Indias tallest residential towers, ‘Aaradhya Avaan, in Tardeo standing over 1,000 feet tall with a construction area of 1.8 million sq. ft. Its EPC arm has also secured the PMC contract for the Vile Parle residential project, which comprises 14 towers and a total construction area of 1.4 million sq. ft. The company will earn a PMC margin on the construction work over the duration of the project.

Long Term Outlook

• Strategically selective in building healthy order book

• Continue identifying lucrative opportunities in ports, infrastructure and government sectors

• Upcoming real estate project launches expected to strengthen the order book and generate PMC fees

Consolidated Financial Performance Revenue & Profitability

• The companys consolidated revenue from operations for FY25 stood at 1,108 crores and reported a total income of 1,231 crores.

• MICL achieved Net Profit of Rs.283 crores with a net profit margin of 23.0%

Balance Sheet

• The consolidated net worth of the company for FY25 stands at Rs.1,763 crore

• The company has gross debt of Rs.36 crores and continues to be Net Debt Free with cash and cash equivalents of Rs.570 crores providing considerable strength for future growth

• MICL raised an amount of Rs.543 crores via preferential issue in Dec-23 primarily for business expansion.

• It has received Rs.183 crores as on Mar-25 and will receive balance Rs.360 crores on or before July 2025 which will further enhance MICLs financial position for future project acquisitions

Risk Management:

The Company works in an environment which is affected by various factors, some of which are controllable while others are outside the control of the Company. At Man Infra, we have developed a vigorous risk management framework that reduces the volatility due to unfavorable internal and external events, facilitates risk assessment, mitigation and reporting procedures 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. Macroeconomic Risk Risk:

• Real estate and EPC sectors are inherently cyclical

• Sensitive to changes in GDP growth, interest rates, inflation, and consumer sentiment

Mitigation:

• Adopted a conservative approach with internal financial safeguards

• Use of joint development model to reduce upfront capital risk

• Maintained a net debt-free position with comfortable liquidity

• Focus on working with financially stable clients with timely payment records

2. Policy Risk Risk:

• Non-Compliance with RERA regulations

• Delays and cost overruns

Mitigation:

• All active projects are RERA-registered, ensuring compliance and transparency

• Regular quality and timeline check at key project milestones

• Strong financial discipline and focus on on-time project delivery

• Maintains high construction standards

3. Execution Risk Risk:

• Project timelines may be affected by regulatory procedures, approvals, and resource availability

Mitigation:

• Well-defined operating procedures followed from project planning to execution

• Internal monitoring systems help maintain process discipline

• Detailed due diligence before entering joint development partnerships

4. Liquidity Risk Risk:

• Significant initial investment and returns at expected at the end of project

• RERAs mandates 70% allocation to project specific accounts

• Project delays can impact cash flows

Mitigation:

• Prudent planning of cash flows and disciplined capital deployment

• Strong working capital management practices

• EPC contracts often provide mobilization advances to support upfront funding needs

• Net Debt free as of March 31, 2025

5. Input Price Risk Risk:

• Cost overruns due to rising material and labor costs

Mitigation:

• Risk accounted for at project launch

• Phased sales to cover rising construction costs

6. Sales Volume Risk Risk:

• Actual sales may vary from projections due to changing market preferences or economic conditions

Mitigation:

• Careful selection of projects based on location, design, and market trends

• Delivering superior quality and building strong client relationships

• Utilizing latest technologies and cost-e_ective measures for timely delivery

• Offering distinctive project features to stand out in the market

Human Resources

The strength of MICL lies in its people. A motivated, skilled, and engaged workforce is vital to driving growth and sustaining business excellence. The Company continues to invest in developing its human capital, recognizing employees as its core competitive advantage.

Employee Development

• Management is dedicated to continuously upgrading skills and competencies at all levels through extensive training.

• Focuses fostering employee development, and offering competitive compensation

• As of 31st March 2025, the MICL Group employs over 800 individuals

Expertise and Culture

• Well-qualified employee possessing the technical expertise necessary to execute projects

• Maintaining an excellent work culture with high retention ratio

• The Company is committed to ensuring safe working conditions and promoting social awareness among all its employees

Internal Control Systems

The Company has an adequate internal control system in place to safeguard all assets and ensure their efficient productivity. It employs a quality management system for design, planning, and construction that complies with international quality standards.

Business Processes and Operations

• Company has a suitable internal control system for the business processes, operations, financial reporting, compliance with applicable laws and regulations

• Successfully implemented Enterprise Resource Planning (ERP) software at its Head Office and across its sites

• Periodical audits conducted by an Internal Audit firm ensure the adequacy of internal control systems and adherence to management policies

• When necessary, internal control systems are reassessed and corrective actions are taken

Cautionary Statement

This management discussion and analysis may contain forward looking statements that reflects Companys performance with respect to future events. The management believes these to be true to the best of its knowledge at the time of preparation of this report. The actual results may differ materially from those anticipated in the forward-looking statements as a result of many factors.