Marathon Nextgen Realty Ltd Management Discussions

ECONOMIC OVERVIEW

Global Economy

The global economy demonstrated remarkable resilience, navigating a complex landscape of shifting trade policies, geopolitical tensions and tighter financial conditions. According to the International Monetary Fund (IMF), the world economy grew by an estimated 3.2% in 2024, with advanced economies expanding by 1.7% and emerging and developing economies registering growth of 4.2%. This reflects the varied but improving macroeconomic dynamics across regions. The U.S. economy recorded a 2.8% growth for the year, buoyed by stable consumer spending and business investment, while the Federal Reserve responded to evolving conditions by cutting policy rates by 100 basis points between October and December 2024. Similarly, the European Central Bank reduced rates by 25 basis points in Q2 2025 as Eurozone inflation fell below its target. China continued to support global output with 5.4% growth, supported by fiscal stimulus, infrastructure spending, funding for green transition initiatives, despite headwinds in exports and real estate.

Looking ahead, the global economic outlook presents a measured but stable trajectory. The World Bank projects global economic growth to remain moderate at 2.3% for 2025, representing the slowest non-recessionary pace in decades.

However, targeted fiscal and monetary interventions by policymakers worldwide have helped to stabilise expectations and support recovery momentum. Recent developments, including the 90-day suspension of new tariffs between the US and China, the finalisation of the US-UK trade agreement and the easing of commodity prices, have provided timely relief to global markets. Inflationary pressures are retreating across most major economies, with global headline inflation projected to average between 3.4% and 4.2%, creating headroom for further policy support.

The outlook remains cautiously optimistic, underpinned by strengthening fundamentals across key economic indicators.. Emerging Market and Developing Economies, particularly in Asia and Latin America, are expected to continue outpacing global averages, supported by favorable demographics, capital inflows and structural reforms. Energy markets have stabilised, supply chains continue to recover and investor sentiment is improving across major economies. While downside risks persist, including potential escalation of trade barriers, geopolitical conflicts and climate- related disruptions, the balance of risks is gradually shifting towards opportunity. The global economy appears to be entering a new phase marked by renewed momentum, driven by innovation, cooperation and increased investment in long-term productivity.

Indian Economy

India navigated FY25 with sustained momentum, emerging as a pillar of strength amid a global environment characterised by moderating growth, monetary tightening and geopolitical uncertainty. Economic activity remained broad-based, supported by resilient domestic consumption, elevated public capital expenditure and improving investment traction. According to official estimates, real GDP expanded by 6.5% during the year, with growth accelerating to 7.4% in Q4 FY25, driven by a sharp uptick in private consumption (PFCE up 12%) and double-digit growth in construction (10.8%).

India has now become the fourth-largest economy in the world, surpassing Japan, with a $4 trillion economy. The countrys per capita income has also doubled since 2014, reflecting widespread economic gains and improving living standards. Unlike many economies that relied on external demand or policy stimulus, Indias performance was underpinned by robust internal demand strength and fiscal prudence.

Macroeconomic conditions remained stable through the year, despite global volatility. Inflation averaged within the Reserve Bank of Indias (RBI) tolerance band during FY25, supported by effective food supply management and a decline in international commodity prices. Towards the end of the fiscal year, inflationary pressures began easing more visibly, setting the stage for a shift in monetary policy in early FY26. Headline CPI fell to 3.2% in April and then dipped further to 2.82% in May, the lowest in over six years. This allowed the RBI to reduce the repo rate by 50 basis points and implement a phased 100 basis points cut in the Cash Reserve Ratio (CRR), initiating a calibrated pivot towards growth-oriented policy.

The external sector remained resilient.

The Indian rupee experienced a modest 1.3% depreciation in May 2025, which was effectively contained through ample foreign exchange reserves and timely market interventions. Bond yields reflected improving sentiment and falling inflation expectations, with the 10-year G-sec yield softening to the to a range of 6.15%-6.27%. Public infrastructure spending remained elevated throughout the year, while private investment gained momentum in core sectors such as logistics, energy and digital manufacturing. Credit growth remained healthy, supported by stronger banking sector balance sheets and improving formalisation trends.

Looking ahead, India is expected to maintain its growth leadership, with GDP projected to grow by 6.3% and 6.5% in 2025 and 2026, respectively—well above the global average of 2.3% and 2.4% in the same years, according to World Bank estimates.. Stable inflation, improving liquidity conditions and continued structural reforms position the economy in a strong position for continued expansion. With rising investor confidence, exceptional results characterised by structural strength, sustained demand momentum and disciplined capital allocation. Operating within an increasingly supportive macroeconomic framework—highlighted by GDP expansion, private consumption growth and inflation moderating to six-year lows—the housing market achieved an optimal balance of volume expansion and pricing discipline. This multi-year growth cycle has fundamentally transformed the industry from a fragmented, speculative marketplace into a sophisticated, institutionally-backed sector driven by genuine end-user demand. As a result, residential real estate has emerged as a cornerstone of Indias broader economic growth story.

The residential real estate landscape in FY2025 was shaped by a absorption consistently outpacing new launches across key markets. This imbalance, while temporarily constraining supply availability,

has fundamentally strengthened market fundamentals. Indias average inventory overhang reduced to 14-16 months during the year, representing the lowest levels witnessed in over a decade. The moderation in new supply was primarily attributed to macro-administrative factors rather subdued demand. Simultaneous general and state elections, absence of regulatory committee leadership in certain regions, procedural amendments in local policies and backlogs in project approvals contributed to delays in clearances.

These temporary constraints resulted in decelerated absorption levels in the latter half of the financial year, purely as a consequence of limited new supply rather than demand fatigue. Importantly, this supply rationalisation has yielded several positive outcomes, including improved pricing discipline across markets, accelerated project completion timelines and a narrowing gap between registered and livable inventory. favourable demographics and a focused policy environment, India is poised to contribute meaningfully to global growth while reinforcing its own long-term trajectory.

INDIAN REAL ESTATE INDUSTRY

FY25 marked another strong year for the Indian residential real estate sector, continuing a multi-year growth trajectory that has firmly cemented its position as one of the countrys most resilient and dynamic industries. Building on successive years of robust performance, the sector delivered

The monetary policy environment has become increasingly favorable for real estate growth. Interest rate cuts and Cash Reserve Ratio (CRR) reductions implemented in the first half of 2025 have significantly enhanced liquidity in Indias financial system, unlocking substantial funds for lending while reducing borrowing costs. This liquidity infusion is expected to stimulate credit expansion, benefiting both developers and homebuyers as well as providing broad-based support to the real estate ecosystem. Affordability metrics have reached their most favorable levels in recent history, creating an enabling environment for homeownership across income segments. The EMI-to-income ratio across major cities now ranges between 18-30%, supported by moderate interest rates, growing household incomes and competitive pricing. This improvement is particularly pronounced in key markets. Mumbai remains an exception, with a higher ratio of 48% in H1 CY25—though this still marks a notable improvement from 50% in CY24 and a peak of 93% in CY10. In comparison, the NCR has seen its ratio decline to 28% from 53% in CY10 and Bengaluru has improved to 27% from 48% over the same period. These improvements indicate that rising affordability is creating meaningful opportunities across urban India, particularly for salaried middle-class families seeking functional, future-ready homes.

Pan-India Tier 1 city real estate market has demonstrated exceptional resilience and growth momentum over the FY20- FY25 period, with sales volumes surging from 2.78 lakhs units to 4.56 lakhs units, representing a robust 64% growth trajectory. Following a temporary contraction in FY21 with sales dropping to 1.94 lakhs units due to pandemic-related disruptions, the market exhibited a strong V-shaped recovery, posting consistent year-on-year growth from FY22 onwards. New supply dynamics closely aligned with demand patterns, growing from 2.66 lakhs units in FY20 to 3.93 lakhs units in FY25, indicating a well-calibrated market response and healthy supply-demand equilibrium. The synchronised growth in both sales and supply metrics, particularly the sustained momentum post-FY22, reflects simproving consumer sentiment, stronger market fundamentals, and the underlying strength of Indias Tier 1 cities. This positions the sector for continued expansion in the coming years.

Commercial Real Estate Performance

Indias commercial real estate sector entered a phase of sustained growth after a prolonged slump, beginning its recovery in the years following 2013. By the end of the decade, vacancy rates had steadily declined while both demand and supply had reached new cyclical highs. The market saw robust activity, with leasing volumes and project completions registering sharp increases Y-O-Y This momentum, however, was disrupted by the onset of the COVID-19 pandemic. The years immediately following the outbreak witnessed a sharp contraction in demand, even as supply levels remained relatively elevated. This led to a temporary build-up in vacancies, as occupier activity slowed dramatically. Recovery began to take hold in 2022 and 2023, as demand started to rebound. While it still lagged behind supply, the gap narrowed gradually. A notable shift occurred in 2024, when leasing activity surpassed completions, marking a reversal in trend and leading to a decline in overall vacancy levels.

This positive trajectory has continued into the first half of 2025, with demand consistently outpacing new supply additions. The commercial real estate segment continues to demonstrate strong absorption rates, among the highest recorded in recent years. Any potential headwinds from the Indian IT sector has been effectively offset by increased demand from Global Capability Centres (GCCs) and diversified corporate segments. Developer consolidation has emerged as a key strength factor, with organised players possessing strong balance sheets capable of incurring the substantial upfront capital expenditure required for commercial asset development. This consolidation trend has improved overall market quality and significantly reduced fragmentation across the commercial real estate landscape.

Regulatory Transformation and Market Maturation

The Indian real estate sector has undergone significant transformation through comprehensive regulatory reforms including RERA, GST implementation, digitised land records and enhanced zoning regulations. This regulatory maturity has redefined real estate as an institutional-grade asset class while substantially enhancing end- user confidence. The RERA framework has improved project transparency and ensured stricter adherence to delivery timelines, while GST implementation and digitisation of land records have streamlined taxation processes and strengthened title security. These regulatory interventions have reduced buyer skepticism and enabled formal developers to scale operations with greater confidence. Contemporary buyer preferences reflect this shift toward formalisation, with increasing demand for projects by reputed, RERA-compliant developers offering well-designed, well- connected homes with clear governance standards, robust escrow controls and consistent delivery records.

Demand Segment Analysis

Indias affordable and mid-income housing segment remains the backbone of residential real estate. The urban housing shortage exceeds 10 million units, with over 80% of residential absorption concentrated in homes priced below Rs crores. Government initiatives including PMAY-Urban and targeted interest subsidies continue to strengthen this demand segment. The growth trajectory of Tier 2 and Tier 3 cities, combined with mass transit infrastructure development in metropolitan regions, is making suburban housing increasingly viable. Homebuyers in these segments seek aspirational products at reasonable entry prices, with essential access to transportation, education, healthcare and employment opportunities. Developers strategically aligned with this segment continue to benefit from both policy support and inherent demand strength, with strategic execution in emerging suburbs, high-volume townships and infill redevelopment opportunities.

The Indian residential real estate sector is positioned to enter a sustained phase of formalized growth. As the macroeconomic cycle turns increasingly favorable, with the Reserve Bank of India expected to implement a 75-basis-point rate cut in the second half of 2025, conditions will become even more conducive for housing affordability, particularly benefiting price-sensitive affordable and mid-income segments. Lower EMIs, combined with stable pricing, are expected to unlock significant pent-up demand among salaried and self-employed urban households who deferred purchasing decisions due to financing constraints. As Indias GDP per capita rises and household incomes grow across urban and Tier-2 markets, homeownership aspirations will deepen, supported by improving credit penetration and increasing financial literacy. The governments continued focus on urban housing, including the H10 lakhs crores sPMAY-Urban 2.0 programme, is anticipated to catalyze supply development in key affordability corridors, while substantial infrastructure investments encompassing metro rail expansion, highway development and smart city upgrades will reshape the real estate landscape across metropolitan and peripheral zones. Following the 2024 general elections, policy continuity and restored administrative stability are anticipated to unlock delayed project approvals, accelerating new launches and improving volume visibility for organised market participants.

MUMBAI METROPOLITAN REGION

The Mumbai Metropolitan Region (MMR) maintains its position as the epicenter of Indias residential real estate landscape, representing the most advanced, competitive and high-value housing market in the country. With a population exceeding 2.5 croress and contributing nearly 6% to Indias GDP, MMR functions as an economic powerhouse with the potential to double its GDP to H26 lakhs croress by 2030, according to NITI Aayog projections. FY25 reconfirmed MMRs critical importance to the national housing narrative. Despite two elections in Maharashtra—which temporarily constrained new project launches— the region still accounted for approximately one-third of both new launches and residential sales across Indias top seven cities. Inventory overhang across MMR fell to its lowest since 2010, with absorption once again outpacing new supply additions, reflecting both supply rationalisation by developers and increased purchase confidence among end- users.

The pricing environment in MMR remained fundamentally robust, recording mid-to-high-single-digit compound annual growth rates over the past five years, driven by genuine demand, rising input costs and improved product quality. While central and island city zones maintained their high-value market positions, peripheral and extended suburbs, including Panvel, Dombivli, Kalyan, Mira-Bhayandar and parts of Navi Mumbai, experienced heightened market traction, offering optimal balance of affordability scale and connectivity.

MMR has emerged as a standout performer within Indias real estate landscape, recording one of the highest growth rate among major metropolitan markets with sales volumes escalating from 0.83 lakhs units in FY20 to 1.57 lakhs units in FY25 - an impressive 89% surge that significantly outpaced national averages. What distinguishes MMR is its remarkable acceleration trajectory, particularly the exponential growth witnessed in FY24-FY25 where sales jumped from 0.92 lakhs to 1.26 lakhs and further to 1.57 lakhs units, highlighting the regions unique appeal to homebuyers and investors. On the supply side, while initially constrained during FY21-FY22 with volumes dipping to 0.39 lakhs and 0.67 lakhs units respectively—developers have demonstrated strong adaptability. By FY25, new supply had recovered to 1.43 lakhs units, reflecting a responsive and maturing market.

However, a modest supply-demand gap persists, indicating continued strong absorption capacity and reinforcing MMRs premium positioning within the national real estate ecosystem.

Infrastructure as Growth Catalyst

Infrastructure development continues to serve as a transformational catalyst for housing demand across MMR, with recent delivery of landmark infrastructure assets fundamentally altering connectivity dynamics. The operationalisation of the Mumbai Trans Harbour Link (Atal Setu) has significantly reduced travel time between Navi Mumbai and South Mumbai, integrating peripheral housing markets into the broader economic framework, while the launch of the Coastal Road project and select Mumbai Metro expansion phases have eased urban congestion— unlocking residential development potential in previously underserved micro-markets. Looking ahead, the delivery of major infrastructure assets—including the Navi Mumbai International Airport, the Mulund-Airoli- Palava freeway and additional Mumbai Metro network extensions are scheduled for delivery within the next two to three years. These improvements are expected to further enhance connectivity and narrow price differentials between core city areas and suburban markets, encouraging homebuyers to evaluate suburban options with greater confidence and enhanced long-term livability expectations.

Evolving Demand Profile

The demand profile within MMR remains distinctly end-user-led, with buyers emphasizing timely delivery, functional layouts, social infrastructure proximity and developer credibility. In FY25, ready-to- move and near-completion inventory saw significantly higher absorption compared to under-construction projects, highlighting a maturing buyer psychology where risk aversion, financial planning and asset usability are paramount. In this evolving landscape, developers with clean balance sheets, strong governance standards and strategically located land banks maintain clear competitive advantages. Organisations with a track record of institutional credibility, fiscal prudence and deep micro-market expertise are exceptionally positioned to leverage emerging market dynamics. Strong relationships with financial institutions, regulatory authorities and homebuyers provide operational flexibility to navigate both opportunities and challenges effectively. Companies with project pipelines tailored to modern, urban and upwardly mobile Indias requirements, supported by execution capacity matching both scale and speed demands, are actively shaping the next chapter of Indian urban living.

FY2025 has established a solid foundation for sustained growth in Indias residential real estate sector. Currently contributing nearly 7% to Indias GDP, the real estate sector is projected to reach $1 trillion in market size by 2030, representing approximately 15% of GDP. The combination of improving affordability metrics, regulatory maturity, infrastructure development and strong end-user demand creates In FY25, ready- to-move and near-completion inventory saw significantly higher absorption compared to under-construction projects, highlighting a favorable environment for organised, credible developers with strategic market positioning. As the nation progress into FY2026, the sectors evolution toward greater formalisation, enhanced transparency and improved financial discipline positions it as a compelling investment destination for both domestic and international capital. The confluence of supportive monetary policy, continued government focus on urban housing and robust underlying demand dynamics creates a compelling growth trajectory for the Indian residential real estate market, with well-positioned developers poised to to unlock sustainable value creation in the years ahead.

BUSINESS DEVELOPMENT

FY2025 was a defining year for Marathon Nextgen Realtys business development strategy, marking the first step toward structural consolidation, significant land bank expansion and a deepened focus on institutional-grade execution. The proposed merger of key promoter-led entities into the listed Company, once approved by regulatory authorities, will materially enhance the Companys development potential by unifying over 400 acres of strategically located land under a single, transparent and professionally governed platform. This consolidation will strengthen Marathons ability to execute multi-format, multi- phase developments across high-growth corridors including Panvel, Bhandup and Dombivli.

During the year, the Company sharpened its development strategy across residential, commercial and mixed-use formats to align with evolving consumer demand and market conditions. In the residential segment, a robust pipeline of projects across mid-income, affordable and premium categories was advanced toward launch readiness, with clear emphasis on efficient product design, affordability and customer-centricity. In the commercial portfolio, the Company continued to enhance offerings that cater to the growing demand for modern office spaces, while also evaluating new opportunities in emerging asset classes such as data centers, warehousing and rental housing.

A notable highlight of the year was the successful conversion of approximately 26.42 acres of long-term leasehold land in Panvel to freehold ownership by the Companys subsidiary, Sanvo Resorts Private Limited. This conversion secures full ownership rights over a prime development asset in Panvels rapidly expanding corridor, enabling us to maximise the lands development potential without leasehold constraints. The Company also recorded strong progress across its ongoing developments. At Nexzone, Panvel, Occupation Certificates (OC) were received up to the 27th floor for Triton and the 26th floor for Atria, marking steady advancement. At Monte South, the landmark residential project in South Mumbai, Tower A received OC up to the 64th floor and Towers B and C continued to progress on schedule. These milestones reflect consistent execution and growth across key projects in the Companys portfolio. The affordable housing segment remained robust— particularly at the NeoHomes cluster in Bhandup, comprising Marathon Neopark, Neosquare and Neovalley, all of which advanced meaningfully during the year.

During FY25, MNRL recorded carpet area sales of 2.65 lakhs sq. ft., translating to a booking value of Rs 605 crores and collections of Rs 769 crores. These figures include the Companys 40% share in the Monte South project. The year witnessed a decline in sales volume on a carpet area basis, primarily due to fewer new launches. However, pricing remained firm, with commercial sales achieving an average realisation of Rs 36,308 per sq. ft. and residential sales averaging Rs 17,881 per sq. ft. All projects such as Monte South, Nexzone, Neovalley and Futurex continued to register steady buyer interest and stable conversion rates, reflecting continued confidence in the product portfolio.

From a financial perspective, revenue from operations declined by 18% YoY to Rs 580 crores in FY25. This was largely due to the reclassification of inventory at Marathon Futurex as investment property in earlier years. As a result of this reclassification, the sale of this area was not recognised under revenue from operations; only the associated profit was recorded under other income. The decline was partially offset by higher other operating income, which increased after the Company received occupancy certificates for some towers in the Nexzone project. This enabled the company to recognise charges for amenities such as gymnasium, clubhouse and swimming pool across a significantly larger area compared to the previous year. Meanwhile, other income grew by 134% YOY, primarily driven by profits from the sale of investment property inventory at Marathon Futurex, with no comparable transactions recorded in FY24.

In terms of profitability, the Company achieved EBITDA of Rs 269 crores, representing a strong EBITDA margin of 40%—a significant improvement from 37% in the previous fiscal year. Profit after tax reached Rs 191 crores delivering a healthy PAT margin of 28%. This exceptional bottom-line performance demonstrates the Companys operational efficiency in converting project execution into sustainable financial returns while maintaining disciplined overhead and financing cost management.

Beyond strong operational profitability, MNRL demonstrated exemplary financial discipline by significantly strengthening its balance sheet. Consolidated Net Worth stood at Rs 1,187 crores as of March 31, 2025, reflecting strong growth driven by healthy internal accruals, while total assets increased to Rs 2,097 crores. The Company achieved substantial deleveraging during FY2025, reducing total borrowings to Rs 560 crores and net debt to Rs 542 crores significantly improving the net debt-to-equity ratio from 0.75x to 0.46x. Cost of debt declined to 12.3%, reflecting improved creditworthiness and sophisticated treasury optimisation. The strategic debt reduction not only fortifies the Companys financial foundation but also creates substantial capacity for future growth investments in project development, construction acceleration and strategic land acquisitions.

Looking ahead, Marathon Nextgen Realty stands at the threshold of a transformative growth trajectory, anchored by Mumbais unparalleled economic fundamentals and the Companys strategically curated asset portfolio. The Board-approved consolidation of over 400 acres across Mumbais premier growth corridors—Panvel, Bhandup and Dombivli—awaiting regulatory completion within 12-15 months, establishes a unified development platform of unprecedented scale and capability. Mumbais demographic dividend, supported by per capita income levels exceeding H4.6 lakhs and accelerating infrastructure investments including the Navi Mumbai International Airport and Metro network expansion, creates a compelling demand environment for the Companys strategically positioned land assets. The monetary policy environment remains supportive, with anticipated rate cuts enhancing affordability metrics and unlocking latent homebuying demand across the Companys target segments.

Our operational excellence, demonstrated through industry-leading profitability margins, cupled with strengthened capital structure post the H900 crores institutional fundraise, provides the financial flexibility to capitalise on emerging opportunities while maintaining the commitment to disciplined capital allocation. With a team of over 600 professionals, a strong track record of timely project delivery and a robust corporate governance framework, MNRL is exceptionally positioned to benefit from the ongoing formalisation and institutionalisation of Mumbais real estate sector homebuyers and investors. The next few years represent a defining period for Mumbais real estate market and Marathon is uniquely positioned to emerge as one of the markets leading platforms, delivering sustained value creation across a diversified portfolio while establishing new benchmarks for operational excellence and stakeholder returns in Indias most dynamic metropolitan real estate market.

SWOT ANALYSIS

Strengths

Established Legacy and Brand Leadership in MMR

With a legacy spanning over 50 years, MNRL has cemented its reputation as a trusted and quality-conscious real estate developer in the MMR. The Company has a proven track record of delivering landmark residential and commercial projects across strategic micro-markets such as Panvel, Dombivli, Bhandup and Byculla. This legacy has translated into high brand recall, strong customer loyalty and repeat buyer engagement.

Robust Land Reserves and Strategic Location Advantage

The Company is in the process of a merger which, once implemented, will provide direct access to a substantial land bank of over 400 acres across key MMR regions, including Panvel (205 acres), Bhandup (130 acres) and Dombivli (83 acres). These strategic land holdings will provide long- term development visibility and resilience against escalating land acquisition costs, positioning the Company advantageously for future growth phases.

Annual Report 2024-25

Well-Diversified Portfolio Serving Customers Across Price Points

MNRL maintains a comprehensive and balanced portfolio of commercial projects and residential developments across multiple price segments, catering to a wide spectrum of economic and demographic segments from luxury to integrated townships and affordable housing. The Companys luxury portfolio is strategically branded under the prestigious Monte series, with flagship projects such as Monte South at Byculla. Township developments are launched under the Nex brand series, exemplified by Nexzone at Panvel, while affordable housing projects in Bhandup are branded as NeoHomes. The commercial property portfolio encompasses large office spaces under the Marathon Futurex sub-brand located in Lower Parel and small business spaces under the Marathon Millennium sub-brand in Mulund. This diversification strategy enables effective risk mitigation while maximising opportunities to capture varying market segments across MMR.

In-House Execution Capabilities and Deep MMR Regulatory Expertise

The Company has demonstrated exceptional execution capabilities with a track record of delivering over 5.68 lakhs sq. ft. of commercial and residential projects, covering approximately 20.97 lakhs sq. ft. of carpet area as of March 31, 2025. The Companys comprehensive in-house execution capabilities represent a core competitive strength and key differentiator from competitors in the market. As of March 31, 2025, MNRLs execution team comprises 453 professionals across multiple disciplines, enabling end-to-end project lifecycle management from regulatory approvals to planning, design, engineering, marketing, sales and property management. The Companys effective land acquisition and conversion expertise has facilitated the development of a steady project pipeline, including specialised capabilities in executing projects under the Slum Rehabilitation Authority (SRA) model. With five decades of operational experience in MMR micro-markets, Marathon Nextgen has cultivated deep expertise in local regulatory frameworks governing the region.

World-Class Construction Technology and Quality Infrastructure

MNRL leverages cutting-edge construction technologies including Kumkang formwork (aluminum formwork technology for accelerated construction completion) and PERI formwork systems to ensure structural integrity and longevity of Grade-A certified buildings. Strategic partnerships with international structural consultants and premium equipment suppliers—including high-quality lifts from leading Japanese and Swiss engineering firms, and construction equipment from German manufacturers—underscore the Companys commitment to world- class construction standards. The Companys on-site batching plants and material testing laboratories ensure rigorous quality control and adherence to industry-leading standards throughout the construction process. This integrated quality infrastructure enables the production of high-grade concrete and superior finishing that contributes to achieving exceptional occupancy rates across the project portfolio.

Advanced Marketing and Sales Ecosystem

MNRL operates a sophisticated marketing and sales infrastructure designed to maximise customer engagement and accelerate inventory conversion. The Company utilises a custom-designed CRM platform complemented by social media-oriented tools including automated WhatsApp alerts and enhanced targeted marketing systems to optimise customer touch points. The sales network is strengthened by over 250 active channel partners, while on-ground sales teams leverage cutting-edge tools such as Virtual Reality (VR) to create immersive buyer experiences. This comprehensive sales strategy is engineered to generate maximum inventory conversion at project launch, with demonstrated success achieving over 50% inventory sales within 12 months of launch for projects such as Neovalley Narmada and Nexzone Cedar, reflecting strong brand trust and market confidence. The Companys marketing and sales capabilities, combined with a strategic inventory of unsold, Occupation Certificate (OC) ready units, position Marathon Nextgen to efficiently meet consumer demand while capitalizing on ready-to-sell inventory and executing seamless sales processes.

Weaknesses

Regulatory and Approval Complexities

The real estate sector faces multi-layered regulatory frameworks with lengthy approval processes for SRA projects, environmental clearances and building permits, leading to project delays and increased compliance costs across the industry. While MNRL has developed substantial expertise in navigating these challenges through five decades of operational experience, the evolving regulatory landscape requires continuous adaptation and significant management attention. The lengthy approval processes can impact cash flow projections, delay project launches and create uncertainty in financial planning. However, the Companys deep institutional knowledge of local regulatory ecosystems and established relationships with regulatory bodies provides a strategic advantage in managing these complexities more effectively than newer market entrants, particularly in high-barrier redevelopment zones where regulatory expertise becomes a crucial competitive differentiator.

Vulnerability to Policy Shifts and Taxation

The real estate sectors sensitivity to policy changes creates ongoing uncertainty in project planning and financial forecasting. Frequent modifications to stamp duty rates, GST structures, premium charges and Floor Space Index (FSI) norms can dramatically impact project feasibility and returns on investment. These policy shifts often occur with limited advance notice, requiring rapid strategic adjustments and potentially affecting ongoing sales and marketing strategies. Changes in taxation policies can alter the effective pricing of properties for end customers, impacting demand patterns and sales velocity. MNRL manages this vulnerability through proactive engagement with policy developments, maintaining flexibility in product pipeline planning and sustaining a diversified portfolio that allows rebalancing across different ticket sizes and project formats in response to regulatory changes. The Companys experience across multiple policy cycles provides institutional knowledge for adapting strategies.

Market Cyclicality and Demand Volatility

The real estate sectors inherent cyclical nature creates challenges in demand forecasting and inventory planning, as market conditions shift based on economic cycles, interest rate fluctuations and policy changes.

These cyclical patterns affect different segments differently, with luxury showing higher volatility during downturns while affordable housing remains more resilient. MNRL mitigates these challenges through maintaining a balanced product mix across premium, mid-income and affordable segments, along with strategic OC-ready inventory that provides flexibility to align sales strategies with real-time demand trends and capitalise on market opportunities.

Environmental and Sustainability Compliance

Increasingly stringent environmental regulations and sustainability mandates require substantial investments in green building technologies, waste management systems and energy-efficient construction practices. These compliance requirements add complexity to project planning while increasing both capital and operational costs. Environmental impact assessments and sustainable construction practices require specialized expertise and continuous monitoring throughout project lifecycles. MNRL addresses these challenges through engagement with professional consultants and integrating environmental considerations into design processes, particularly for township projects. However, the evolving nature of environmental regulations requires continuous investment in new technologies, creating ongoing operational and financial implications.

Opportunities

Affordable Housing Demand and Policy Support

The expanding trend of urbanisation is creating unprecedented demand in the affordable housing segment, with Economically Weaker Section households accounting for 45.8% of total housing requirements. The cumulative affordable housing demand is projected to reach 31.2 million units by 2030, representing an estimated market size of H67 trillion.

This massive opportunity is further supported by the PMAY-U 2.0 scheme, which aims to construct 10 million urban units by 2029 with substantial backing of H2.30 lakhs crores in central funding and beneficial GST concessions. For MNRL, this represents a significant growth avenue, given their existing NeoHomes brand in Bhandup and proven expertise in affordable housing development— positioning them to capitalise on both organic demand growth and government policy support.

PropTech Innovation Integration

Indias PropTech sector is experiencing explosive growth, projected to reach $12.9 billion by 2030, creating opportunities for traditional developers to enhance operational efficiency and customer experience. PropTech startups are leveraging artificial intelligence for property management, virtual tours and transaction automation, addressing long-standing inefficiencies in broker systems and fragmented markets.

The governments consideration of tax incentives and RandD credits to accelerate this growth presents additional advantages for early adopters. MNRLs existing investment in custom CRM platforms and VR-enabled sales processes positions the Company well to integrate advanced PropTech solutions, potentially reducing operational costs, improving customer engagement and creating competitive differentiation in an increasingly technology-driven market.

Data Centre and Digital Infrastructure Development

Indias commercial real estate sector is witnessing a fundamental shift toward data centres, driven by rapid digitalisation, AI adoption and data localisation requirements. Maharashtra is projected to concentrate approximately 35% of the power capacity, with Mumbai expected to be the largest contributor to the Indian data centre market. These facilities require substantial energy capacity (over 100 MW per facility) and specialised cooling infrastructure, creating opportunities for developers to repurpose existing industrial assets and collaborate with hyperscalers. Given MNRLs substantial land bank in strategic MMR locations and experience with commercial development through Marathon Futurex, the Company is well-positioned to capitalise on this emerging sector by developing purpose- built data centre facilities or converting existing commercial assets to meet the specialised requirements of this high- growth segment.

Redevelopment and Urban Renewal Market

The MMRs aging building stock presents substantial redevelopment opportunities, with thousands of buildings across Mumbai requiring reconstruction or major renovation. The liberalisation of FSI norms and streamlined approval processes for redevelopment projects create favorable conditions for experienced developers. MNRLs specialised SRA expertise and deep regulatory knowledge position them advantageously in this complex but lucrative market segment. The Company can leverage its five decades of operational experience to identify prime redevelopment opportunities, particularly in areas such as Bhandup and Byculla where their existing presence provides local market intelligence and stakeholder relationships essential for successful redevelopment projects.

Threats

Construction Cost Inflation and Labor Shortages

The construction industry is facing unprecedented cost pressures with average construction costs in Tier-I cities recording a 39% increase between 2020-2024, reaching H2,780/sq. ft. Labor expenses have risen by 25% annually, while material costs continue to escalate with specific commodities such as copper experiencing 19% price hikes. These cost inflations are particularly threatening to project viability in the affordable housing sector where slim margins leave little room for cost absorption. For MNRL, this represents a significant challenge to their NeoHomes affordable housing portfolio and overall project profitability. While the Companys advanced construction technologies such as Kumkang formwork and in-house batching plants provide some mitigation, the industry-wide nature of these cost pressures requires continuous operational optimisation and potentially strategic pricing adjustments to maintain margins.

Interest Rate Sensitivity and Affordability Crisis

Despite a 50 basis points repo rate reduction by 2025, housing loan EMIs remain elevated, with upper segment properties experiencing 6.5% YoY price appreciation. This combination of high borrowing costs and rapid price appreciation is creating an affordability crisis that excludes first-time buyers from the market. Developers are pre-emptively increasing prices to counter rising costs, further exacerbating affordability challenges and potentially reducing the addressable market size. For MNRL, this threatens demand across all segments but particularly impacts their mid-income and affordable housing projects where buyer sensitivity to EMI changes is highest. The Companys diversified portfolio provides some protection, but sustained high interest rates could significantly impact sales velocity and lead to inventory accumulation.

Market Polarisation and Demand Segmentation

The real estate market is experiencing dangerous polarisation with luxury sales accounting for 42.9% of total sales in Indias top eight cities, while affordable housing faces a 10.1 million-unit shortage. This reflects increasing urban inequality as premiumisation tendencies divert developer focus away from EWS needs, creating market imbalances. The trend towards luxury development may place pressure on MNRL to shift from their balanced portfolio approach toward higher-margin premium projects— potentially neglecting their their affordable housing expertise and missing the substantial long-term opportunity in the underserved affordable segment.

This market bifurcation also creates competitive intensity in the luxury segmenl while leaving affordable housing demand unmet, complicating strategic positioning decisions.

Economic Slowdown and Consumer Confidence

Broader economic challenges, including inflation, unemployment and reduced consumer spending power, threaten real estate demand across all segments. Global economic uncertainties, geopolitical tensions and domestic policy changes can quickly impact consumer confidence and delay purchase decisions. The correlation between real estate performance and overall economic health makes the sector vulnerable to macroeconomic downturns that reduce both individual purchasing power and corporate real estate investments. For MNRL, an economic slowdown would particularly impact their premium Monte series projects where buyers have more discretionary spendingflexibility. It will affect the affordable segment as wellt where job security becomes paramount for purchase decisions. The Companys diversified portfolio provides some protection, but sustained economic weakness could lead to prolonged inventory cycles, reduced pricing power and cash flow pressures across all project segments.

Risks and Concerns

Land prices, input costs, interest rates, credit market conditions and liquidity can potentially impact the Companys cash flows. Increased production inputs and limited liquidity may weaken consumer prices. Furthermore, the imposition of taxes and levies increases total expenditure, thereby tightening profit margins without adequate selling prices adjustments. To mitigate these risks, MNRL leverages its substantial 400-acre land bank as a natural hedge against escalating land acquisition costs while employing advanced construction technologies such as Kumkang formwork and in-house batching plants to control input cost volatility. The Company maintains strategic diversification across price segments and geographic locations to reduce dependency on any single market condition, while its network of over 250 channel partners and OC- ready inventory provides flexibility to adapt sales strategies during interest rate fluctuations. MNRLs five decades of operational experience enables proactive engagement with policy changes and regulatory frameworks, allowing for strategic portfolio rebalancing in response to tax and levy modifications. The Companys robust cash flow management through phased project development, pre- sales collections and established banking relationships provides liquidity buffers to navigate credit market constraints while maintaining operational continuity during challenging market conditions.

FINANCIAL PERFORMANCE Rs IN LAKHSS, UNLESS STATED OTHERWISE)

	Consolidated		Standalone
	FY25	FY24	FY25	FY24
Revenue from Operations	58,013.53	70,461.50	24,194.22	34,480.73
Other Income	9,626.84	4,122.49	10,988.57	6,519.03
Total Revenue	67,640.37	74,583.99	35,182.79	40,999.76
Expenses	46,851.58	56,568.60	19,049.62	24,269.54
Profit before Tax and Share of Profit from JV	20,788.79	18,015.39	16,133.17	16,730.22
Share of Profit from JV	2,806.53	3,505.51	-	-
Tax Expense	(4,542.19)	(4,642.98)	(2,557.17)	3,172.88
Profit After Tax	19,053.13	16,87792	13,576.00	13,557.34
Other Comprehensive Income	(14.92)	0.59	(12.07)	(1.20)
Total Comprehensive Income	19,038.21	16,878.51	13,563.93	13,556.14
Earnings per Share Basic (H)	37.21	34.43	26.51	28.05
Earnings per Share Diluted (H)	3719	32.50	26.50	26.47

Key Ratios (Standalone)

Particulars	FY25	FY 24	Variation (in %)	Reason for variance
Current Ratio	3.80	3.30	15.33	-
Debt-Equity Ratio	0.24	0.38	(3779)	Decrease in debt
Debt Service Coverage Ratio	1.10	0.82	33.52	Increase in EBIT
Return on Equity Ratio	13.28	15.64	(15.08)	-
Inventory Turnover Ratio	0.58	0.69	(15.33)	-
Trade Receivables Turnover Ratio	41.17	22.70	81.36	Increase in average collection period
Trade Payables Turnover Ratio	21.40	34.43	(3785)	Decrease in trade payable ratio on account of Decreased in purchase
Net Capital Turnover Ratio	0.42	0.82	(48.19)	Increase in working capital
Net Profit Ratio	0.39	0.25	56.00	Capital Gain on Sale of the investment properties
Return on Capital Employed	0.15	0.18	(1707)	-
Operating Profit Margin	0.84	0.69	20.50	-
Return on Net Worth	0.12	0.14	(12.00)	-

HUMAN RESOURCE

Marathon Nextgen Realty has established a centralised Human Resources function that serves as the strategic backbone for talent management across the Group.

The Companys integrated approach to workforce planning directly supports the Companys long-term growth trajectory, market leadership position and operational excellence initiatives.

PEOPLE PHILOSOPHY

The Company recognises that brand strength and human capital are among its most valuable assets. This core belief drives MNRLs commitment to nurturing an inclusive, diverse and agile workplace culture that enables teams to respond dynamically to emerging challenges while fostering innovation in an increasingly competitive real estate environment.

STRATEGIC WORKFORCE DEVELOPMENT

A comprehensive talent development framework focuses on building customer- centric and future-ready professionals. Through targeted learning initiatives and exposure to cutting-edge technologies, the Company ensures its workforce develops the critical capabilities required to thrive in todays rapidly evolving business environment.

CULTURAL FOUNDATION

Marathon champions an entrepreneurial and collaborative culture that empowers employees to take ownership, share innovative ideas and deliver results with integrity. This approach not only drives individual growth but also strengthens collective ability to achieve sustainable business outcomes. MNRLs commitment to excellence is reflected in its structured focus on talent retention, skill enhancement and performance optimisation-ensuring that each team member plays a meaningful role in the Companys success.

INTERNAL CONTROL SYSTEMS

Marathon Nextgen Realty has implemented a robust internal control framework specifically calibrated to its business operations and operational complexity. This comprehensive system is strengthened through regular management reviews and continuous process optimisation. Our internal control architecture is designed to provide comprehensive oversight across all operational dimensions while ensuring effective risk management and regulatory compliance. The system incorporates multiple layers of verification, monitoring mechanisms and corrective action protocols to maintain operational integrity and financial accuracy.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the Company have been prepared in accordance with the Companies Act, 2013 and the applicable accounting standards issued by the Institute of Chartered Accountants of India (ICAI).

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis report are forward-looking within the meaning of applicable securities laws and regulations. These statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Important factors that could influence the Companys operations include changes in government policies, economic conditions and market dynamics beyond managements control.