Modis Navnirman Ltd Management Discussions

REVIEW OF THE GLOBAL ECONOMY

According to the Interna onal Monetary Fund (IMF)s July 2025 World Economic Outlook, global GDP growth is projected at 3.0% in 2025, rising slightly to 3.1% in 2026. The 2024 baseline held at around 3.3% for most sources. However, that is sll below the long-term average of 3.7% achieved in the rst two decades of this millennium.

Dark clouds of tari tensions, primarily originang from the USA, are currently casng a shadow over the global economic landscape, creang uncertainty and poten al headwinds for growth and stability. Tari s imposed by the USA on all their trading partners coupled with counter-tari s levied by China as well as few other countries on the USA has muddied the global growth forecasts. Failure to resolve these trade disputes swily could signi cantly impede global growth through dislocaons in global trade.

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 Internaonal Monetary Fund (IMF).

Key Risks & Structural Challenges

1. Tari volality & trade proteconism Persistent U.S. tari s and elevated trade fricon are key dampeners to global demand and investment. Even par al rollbacks or delays dont fully remove uncertaines.

2. Policy uncertainty Central banks faced polical pressures (notably in the U.S.), complica ng monetary policy and investor con dence.

3. Deglobalizaon pressures Supply chain disrupons, reshoring, and proteconist policies are reducing integra on a headwind to long-term producvity and growth.

4. Debt burdens & investment weakness Especially in developing na ons, high public debt and weak investment are liming growth potenal.

5. Structural stagnaon in advanced economies Low produc vity, aging populaons, and sluggish demand are dragging growth in mature markets.

REVIEW OF THE INDIAN ECONOMY

The IMF projects India s real GDP growth at 6.5 % for FY 2024 25, and similarly for FY 2025 26, powered by resilient private consump on and macro- nancial stability. Indias GDP se led at 6.5 % in FY 2024 25, down from a revised 9.2 % for FY 2023 24. The previous spike included one-o upward revisions. In Q4 2024 25 alone, GDP grew 7.4 %, outperforming forecasts, with contribuons from manufacturing, construcon, and tax revenue.

Private consump on connues to be a key pillar of growth. To smulate demand across rural and urban India, the Union Budget FY26 introduced targeted tax reliefs for individuals, which are expected to further boost consump on in FY26 potenally adding 0.6 0.7 percentage points to GDP growth (Deloi e India Economic Outlook, May 2025).

In May 2025, the geopolical landscape in South Asia experienced renewed volality due to a brief but signi cant military escala on between India and Pakistan. Triggered by cross-border incidents along the Line of Control and the Internaonal Border, the con ict led to a series of military responses, which, while contained diplomacally within a few weeks, marked a signi cant escalaon in a historically volale relaonship between the two countries.

The escalaon resulted in short-term market disrupons. Key indices, including the Ni y 50, declined by over 4% in the immediate aermath, accompanied by increased currency volality. Foreign Instuonal Investors reduced their exposure to Indian equies during this period, cing regional risk aversion. However, such concerns were short lived and the markets seems to have moved beyond the short- term con ict.

The episode underlines the need for India to build a resilient economy, capable of withstanding external shocks and a nimble diploma c strategy to maintain its regional and global ascent.

While our Company does not have direct presence in con ict zones and our business opera ons remained uninterrupted, we connue to monitor regional developments closely and assess their potenal second-order impacts on capital markets, consumer senment and investor con dence.

Outlook & Projec ons

IMF forecasts India s GDP growth at 6.5 % for FY 2025 26, while CRISIL projects a similar 6.5 % with in aon easing to around 4.4 %. Risks include poten al oil price shocks, weather-related agricultural disrupon, and geoeconomic fragmentaon. Despite global disrupons like escalang U.S. tari s India maintained investor con dence thanks to solid forex reserves (~10 11 months of imports) and stable external accounts.

GLOBAL REAL ESTATE OUTLOOK

The internaonal real estate market in 2025 was resilient even as it was confronted with high geopoli cal and economic uncertainty during the rst half of the year. According to JLLs Global Real Estate Outlook, investor senment was cauously posive based on previous valuaon correcon, stable debt markets, and strengthening occupier demand. The rising scarcity of supply across important asset classes was one of the de ning themes of the year. This was parcularly visible in developed economies where new project launches connued to be constrained, thereby favouring exisng and well-located assets. The real estate nance market also saw early indicaons of recovery. With borrowing costs slowly taming, investors started returning to the market to capitalise on rst-mover bene ts. Though volumes con nue to lag pre-pandemic levels, the la er half of FY25 reported signi cant momentum, especially in real estate sectors like logiscs, data centers, and mul-family residenal space. Corporate occupiers also re ected renewed opmism, leading to a consistent pick-up in o ce leasing, especially in top commercial districts.

This was a shi from the extended uncertainty that earlier dominated workplace demand. A key undercurrent that in uenced market dynamics was the fast-tracked march toward decarbonizaon. Across the world, real estate players are acknowledging the intensifying threats of asset obsolescence as the environment becomes progressively more stringently regulated and investor appete turns greener. Exis ng buildings that do not comply with changing green standards stand to be devalued, thus prompng developers and property managers to invest in eco-friendly building and retro ng programs. This shi is not merely regulatory-driven but increasingly re ects broader market expectaons around ESG compliance.

For your companies the implica ons of these global developments are both strategic and operaonal. The constrained supply scenario presents an opportunity to leverage its exis ng projects and planned developments, parcularly in well-connected urban locaons. As interest rates stabilize and capital availability improves, there is a clear window to accelerate project rollouts. Concurrently, the growing global focus on sustainability reinforces the importance of aggressive investment in green building methods and energy-e cient design. Navigang the evolving real estate landscape in FY2025 required a combinaon of adaptability, foresight, and a commitment to long-term value creaon. As the global outlook con nues to evolve, Modi s Navnirman Limited remains focused on integrang these insights into its strategic roadmap, ensuring its o erings remain relevant, resilient, and responsible.

Source: hps://www.jll.com/en-in/insights/market-outlook/global-real-estate

INDIA S REAL-ESTATE SECTOR

India s real estate sector in FY 2024 25 demonstrated resilient growth across residenal, commercial, and industrial segments, despite global economic uncertaines.

Residen al property demand remained strong, par cularly in urban and Tier-2 ci es, supported by a younger buyer demographic, improved housing nance access, and steady infrastructure development.

Prices saw moderate appreciaon, averaging around 5 6%, while sales volumes remained healthy, especially in the a ordable and mid-income segments. The commercial real estate market con nued to thrive, driven by demand for Grade-A o ce spaces, co-working hubs, and data centers, parcularly in cies like Bengaluru, Mumbai, and Gurugram. Industrial and logiscs real estate also gained momentum, fueled by the expansion of e-commerce, supply chain opmiza on, and warehousing needs. Regulatory reforms, increased foreign investment interest, and the rising popularity of green and tech-enabled developments further reinforced the sector s appeal.

Looking ahead, the outlook remains cauously opmisc, with growth likely supported by favorable monetary policy, infrastructure expansion, and evolving consumer preferences.

MUMBAI REAL-ESTATE SECTOR

Mumbai s real estate market remained buoyant throughout FY 2024 25, with residen al unit sales rising by around 11%, driving total housing sales value past 1.24 lakh crore spurred by strong demand in luxury and premium segments across locaons like Worli and Jogeshwari-Borivali.

Infrastructure investments including

Mumbai Metro Line-3 , Coastal Road , and regional rail corridors are unlocking new catchment zones in Thane, Navi Mumbai, and suburbs, a rac ng growth in both a ordable and mid-income housing . Notably, property prices in Thane have surged approximately 46% over three years , consolida ng its status as an emerging investment hub within Mumbai s metropolitan region. Mixed dynamics connue in the premium segment: while high-value homes are driving average cket-size increases and senment in central Mumbai locaons such as ultra-luxury sales in Worli and Bandra the swelling unsold inventory signals a poten al cooldown in buyer appete at the very top-end.

Residen al demand in FY 2025 was strong across premium as well as mid-income housing categories. Micro-markets like South Mumbai, Western Suburbs, Thane, and Navi Mumbai stayed in the fray, supported by a combina on of end-user and investor demand. Developers hastened launches, especially in redevelopment complexes, taking advantage of supporve regula ons and sustained pressure to free land in restricted city areas. The luxury market witnessed increasing tracon, parcularly from HNIs, NRIs, and professionals looking for larger, high-amenity homes post-pandemic.

On the business side, Mumbai remained a prime business des naon, with BFSI, IT/ITeS, and co-working players connuing to lease space. Hubs such as BKC, Lower Parel, Andheri, and Navi Mumbai saw sound occupier demand. Demand for exible spaces con nued to grow, and Grade-A o ce buildings were stable as opera ons con nued at rentals and occupaon levels.

Overall, Mumbai s real estate sector displayed resilience and sophis ca on in FY 2024 25, led by robust residenal ac vity, premium demand, and policy-led infrastructure growth. That said, a ordability pressures, elevated prices, and luxury overhang present challenges as market maturaon advances.

For our company highlight area being Borivali, Kandivali and Malad; In FY 2024 25, the Malad-Borivali-Kandivali corridor emerged as one of Mumbais strongest real estate hubs accoun ng for over 58% of the city s property registraons within the western suburbs and contribu ng signi cantly to the record-breaking sales. Its improving connecvity (Western Express Highway, Metro Line 7, and the upcoming Coastal Road) and steady 6% CAGR over a decade turned it into a popular pick for long-term buyers and families.

BUDGET 2025 TAKEAWAYS: BUILDING MOMENTUM FOR INDIA S REAL ESTATE GROWTH

The Union Budget 2025 26 sets a progressive tone for the real estate sector, combining scal incen ves, infrastructure thrust, and targeted housing support to enable long-term, inclusive growth across geographies and income segments.

Income Tax Relief: Strengthening A ordability

The revised income tax slabs and higher rebate limits is expected to boost household savings and consump on. The increased purchasing power is likely to translate into greater interest in a ordable and mid-segment housing, parcularly in up-and-coming urban clusters.

Revival of Delayed Projects: SWAMIH Push

With a fresh infusion of 15,000 crore under a new round of the SWAMIH fund, the government aims to resolve long-pending a ordable and mid-income housing projects stuck due to last-mile funding issues. This is set to ease buyer anxie es, restore developer con dence, and unlock blocked capital in the system.

PMAY-U 2.0: Scaling Up Housing for All

In line with the Government s vision of Housing for All , PMAY-U 2.0 has been launched with an enhanced allocaon of

19,784 crore a 36% increase over last year s es mate of 13,670 crore. With over 88 lakh homes already delivered under PMAY-U Phase 1, the second phase o ers signi cant opportunies for private developers to partner in delivering sustainable, inclusive housing projects.

Infrastructure-Led Expansion: Unlocking New Growth Corridors

The Budget connues to priorise infrastructure development including roads, railways, and aviaon to improve connecvity and open up real estate opportunies in Tier II and III cies. The launch of the 1 lakh crore Urban Challenge Fund will further catalyse urban development by incen vising cies to raise capital through municipal bonds and Public-Private Partnerships (PPPs), paving the way for long-term real estate expansion

OPPORTUNITES AND CHALLENGES

Opportunies

Redevelopment Boom

Old buildings & housing sociees in South Mumbai, Andheri, Borivali, and Ghatkopar o er high-value redevelopment potenal. Majority of the redevelopment is taking place in Borivali, Kandivali and Malad areas. MHADA and SRA clusters are key focus areas.

Infrastructure-Led Growth

The operaon of Metro Lines 2A, 3, and 7, Mumbai Coastal Road, and Trans-Harbour Link improving connecvity. People are choosing areas farther from the work place because of the easy connecvity opons. It is therefore, boos ng property values in suburbs like Kandivali, Malad, Chembur, and Panvel.

Challenges & Threats

While we are favorably posioned to capitalize on the growth prospects within the Indian real estate sector, there are potenal challenges that the industry might need to navigate in the near to medium term.

1. Increase in housing prices greater than wage growth Economic slowdown for an extended period.

2. Disrupons in job creaon because of ar cial intelligence making certain roles redundant.

3. Job creaon not keeping pace with the aspiraons of the skilled workforce.

4. Geopoli cal risks causing shocks in commodity prices and supply-side disrupon.

5. High interest rates, a ecng purchasing power of the middle class.

RISK AND MITIGATION

Compeon Risk

Risk : While the number of developers has reduced over the last few years, driven by RERA, demonesa on, GST and other reforms, we now have an increasing number of conglomerates entering into the real estate sector, which could mean greater compe on for the exis ng brands.

Migant: The real estate sector has experienced signi cant consolidaon on both the demand and supply sides in recent years. Post-pandemic, homebuyers have become increasingly discerning, favoring established brands and developers with proven track records, leading to market share gains for branded developers like us. Similarly, landowners are demonstrang a preference for partnering with developers with stronger brands, faster execuon melines and superior delivery track records. Lenders, too, are exhibing cauon in extending credit to developers lacking a demonstrable history of successful project delivery. These trends are likely to con nue, increasing the bargaining power in the hands of branded developers with established execu on creden als.

Economic Slowdown

Risk: Job crea on, which is directly linked to the health of the economy, is the primary driver of housing demand in India. Worsening of job senments either due to job losses or reduced rate of new job creaon or inadequate salary growth could lead to slowdown in housing demand.

Migant: Indias economy is projected to grow at 6.6% in FY25 and is expected to be the fastest growing major economy in FY26 as well. The IT sector has demonstrated renewed hiring acvity, following a downturn over the last few years and GCCs connue to be the leaders in incremental o ce space leasing. With ancipated reducon in interest rates and the tax rebates announced by the Government, e ecve from FY26, we ancipate a strengthening of demand in the a ordable and mid-income housing segments over the coming year. We maintain a close watch on evolving economic and industry trends and possess the agility to adjust our product o erings, as well as the ming and scale of our project launches, to e ecvely respond to these dynamic market condions. This approach will enable us to migate the impact of any economic slowdown to a signi cant extent.

Capital Market Risk

Risk: With the rising global uncertainty around geopolics as well as trade tensions, Indian markets led by global markets have corrected thus limi ng the pace of wealth creaon. Mumbai being the nancial capital of the country, also has a large exposure to capital market linked high paying jobs which may slow down or even shrink. This could dampen housing demand especially in the premium and luxury housing. Migant: Housing demand in India is primarily driven by genuine end-user needs. A signi cant poron of the exisng housing stock is outdated and inadequate, even for a uent households seeking premium and luxury housing. Furthermore, the housing sector, parcularly the mid-income segment, is supported by two favorable factors: income tax rebates resulng from the raonalizaon of income tax slabs and the an cipated reducon in mortgage rates due to ongoing policy rate reducons by the RBI. These factors have the potenal to signi cantly revitalize growth in the mid-income housing segment, which has been adversely a ected by high mortgage rates and high in a on over the past three years.

INTERNAL CONTROL SYSTEM

The Company has a robust internal nancial control system, commensurate with the size, scale and complexity of its operaons. This system encompasses adequate controls, procedures and policies designed to ensure the orderly and e cient conduct of business, adherence to established policies, the safeguarding of company assets and the establishment of a reasonable framework for the prevenon and detecon of fraud and errors, as well as the accuracy and completeness of accoun ng records. Appropriate framework is in place to ensure e ecve internal controls over nancial repor ng, thereby enhancing the integrity of the Companys nancial statements. The design of key processes and various policies is subject to periodic review to ensure the ongoing adequacy of controls. The annual internal audit plan is reviewed and approved by the Audit Commiee at the commencement of each nancial year. The Audit Commiee is responsible for overseeing the scope and coverage of the Internal Audit plan and evaluang the o verall audit ndings.

HUMAN RESOURCES

Your Company is always commi ed to the health and safety of its employees. We are commied to developing and further enhancing the skills of our workforce and to providing them with a safe, inclusive, caring and unbiased work environment. Our workplace culture fosters creavity, agility, innovaon and meritocracy. We uphold and are commied to respecng the human rights of all our stakeholders. Your Company provides a clean and hygienic and conducive work environment to all employees. Mental wellness is a posive state of mental health. It ensures that individuals think, feel and act in ways that will create posive impact on their personal and professional life. Your company aims at opmizing mental health. Your Company aims at gender diversity. Women are given equal opportuni es.

OUTLOOK

Your Company ancipates FY 2024 25 to deliver strong operaonal momentum, backed by infrastructure expansion, stable mortgage rates, and favorable regulatory environment. The rm projects sustained growth in residen al demand owing to hybrid work trends and customer-centric project design MNL s solid nancial standing, coupled with its reputaon for exemplary execuon, posions it favorably to capitalize on the prevailing cyclical upturn. We stands at a compelling in ec on point: strong FY 25 performance, strategic corporate restructuring, and improving capital access posi on it favorably to capitalize on Mumbai s redevelopment wave. We an cipate connued strong sales and operaonal performance in FY2024-25, driven by our promising project pipeline, robust balance sheet, and proven experse in execuon. Strategic corporate acon in June July 2025 includes approval to migrate from BSE SME to BSE and NSE Main Boards , accompanied by a merger with its wholly-owned subsidiary. This move is expected to improve liquidity, broaden ins tuonal access, and simplify operaons.

KEY FINANCIAL RATIOS

In accordance with SEBI (Lisng Obliga ons and Disclosure requi rements 2018) (Amendment) Regulaons 2018, the Company is required to give details of signi cant changes (Change of 25% or more as compared to the immediately previous nancial year) in key sector speci c nancial raos.

Raos	FY2025	FY2024	Change (%/bps)	Change (%/bps)	Reason for change
Trade	57.56	40.06	Trade Receivables Turnover =	17.5	Increase in sales and delay in
Receivables			Revenue from Operaons/ Average		payment by debtors leads to
turnover			Trade Receivables		Increase in Trade Receivable
					Rao
Inventory	0.52	0.55	Inventory Turnover = Sale from	(0.03)	Increase in Inventory and
Turnover			Real Estate Developments/Average		Sales leads to Increase in
			Inventory		Inventory
Interest	48.11	84.71	Interest Coverage Rao -Earning	(36.6)	Increase / Addion of new
Coverage			before interest, taxes, deprecia on		debt during the year, interest
Rao			and amorsaon expenses /		expenses have increased,
			Finance		leading to a decrease in the
			Costs		interest coverage rao
Current	2.94	4	Current Ra o = Current Assets /	(1.06)	Decrease in Trade Payable
Rao			Current Liabilies		and Increase in non-current
					Investment leads to decrease
					in Current Rao
Net Debt-	0.04	0.28	Net Debt- Equity Ra o = Net Debt	(0.24)	During the year Company
Equity			(Non-current liabilies		has repay the debts and in
Rao			borrowings (Including current		previous year company has
			maturies of long-term debt) plus		issued the Preferen al
			current nancial liabilies -
			borrowings less cash and
			bank balances and other current
			investments / Equity
Opera ng	14.55	12	Earnings before interest, taxes,	2.55	Increase in Adjusted EBITDA
Pro t			depreciaon, amorsaon		Margin is mainly on account
Margin			expenses and interest included in		of increase in pro t due
(Adjusted			cost of sales/ Total Income		to revenue recognised for
EBITDA			including Share of pro t / (loss) of		certain projects on
Margin) %			joint ventures and associate (net of		compleon of performance
			tax)		obligaon
Net Pro t	0.10	0.11	Pro t for the year / Total Income	(0.01)	Increase in Cost and Income
Margin %			including Share of pro t / (loss) of		Tax Provision leads decrease
			joint ventures and associate (net of		in Net Pro t
			tax)