Mercantile Ventures Ltd Management Discussions

a) Industry Structure and developments

Indias real estate market has closed yet another strong year, with record-breaking leasing and sales and a growing appetite for new launches. Despite global uncertainties, the Indian economy remains resilient, solidifying investor confidence. This optimism is mirrored in Indias office market, with gross leasing hitting a record 53.4 million sq. ft. in January-September 2024. Key sectors, such as IT, BFSI, engineering and manufacturing are fuelling this growth. India has also positioned itself as a Global capability centers (GCC) hub, with over 1,700 centres operating nationwide. In 2024, the GCC market grew by a CAGR of more than 11 per cent, significantly boosting the office market. While traditional hubs like Bengaluru, Delhi NCR and Mumbai lead leasing activity, tier-2 cities are also emerging as promising markets.

b) Opportunities and Threats

Investments in the sector are expanding beyond traditional models, with alternative asset classes like data centres, co-living spaces and senior housing gaining traction, driven by changing consumer demographics and evolving preferences. Overall, with record institutional investments flowing into the sector, Indias position as a global hotspot for real estate investment is enhancing. Looking ahead in 2025, we can anticipate more innovative financing avenues flourishing in the Indian market. This diversification, coupled with advancements in technology and sustainability, is expected to attract more inflows into the sector.

The real estate industry has faced a myriad of uncertainties in recent years, primarily due to rising construction costs, regulatory hurdles and liquidity constraints. There is continued need for policy support, financial access and urban infrastructure development.

c) Segment-wise or produce-wise performance

The company is operating in the segment of leasing of properties and Manpower supply services.

The outlook for this business segment remains positive, with the company well-positioned to earn steady revenue from these operations going forward.

d) Future Outlook and state of the companys affairs

The Company primarily engages in property investments for leasing purposes and provides manpower supply services. Moving forward, the industry is poised for continued expansion, as organizations increasingly prioritize workplace wellness, and intelligent, future-ready office environments.

e) Risk and concerns

The Company has a robust and well-structured framework that actively identifies and evaluates potential risks, ensuring that mitigation strategies are implemented and periodically reviewed for effectiveness. The Board regularly monitors and assesses key risks, emerging threats, and areas of concern to safeguard the organizations interests.

f) Internal control systems and their adequacy.

The company has an adequate internal control system.

g) Discussion on financial performance with respect to operational performance A review for the financial performance is given under review of operations.

h) Material developments in Human Resources / Industrial Relations front, including number of people employed. - Nil

i) Details of significant changes in key financial ratios (Change of 25% or more as compared to the immediately previous financial year)

During the year, on a standalone basis the significant changes in the financial ratios of the Company, which are more than 25% as compared to the previous year are summarized below:

j) Any change in return of net worth as compared to the immediately preceding financial year.

The details of return of net worth as compared to the immediately preceding financial year are provided as given below:

44. Acknowledgement

Your directors express their grateful thanks for the assistance, co-operation and support extended to the Company by promoters, shareholders and the bankers for their continued support. The Directors also place on record their appreciation of the good work put in by the employees of the company.