Modis Navnirman Ltd Management Discussions

ECONOMY REVIEW

Global Economy Outlook

The global economic environment in FY26 is marked by resilient growth amid divergent forces and sustained uncertainty. According to the International Monetary Funds January 2026 World Economic Outlook Update, global GDP growth is projected at 3.3 percent in 2026 and

3.2 percent in 2027 — a slight upward revision of 0.2 percentage points from the October 2025 forecast, and broadly in line with the estimated

3.3 percent outturn in 2025. This steady headline performance, however, conceals significant divergence across regions and sectors.

The key drivers sustaining growth include a surge in technology-related investment — particularly in artificial intelligence —

concentrated in North America and Asia, alongside broadly accommodative financial conditions, fiscal and monetary policy support in several advanced economies, and demonstrable adaptability in the private sector. Trade policy headwinds, most notably the complex tariff regime introduced by the United States, have been partially offset by these tailwinds, allowing the global economy to maintain momentum despite persistent uncertainty.

On inflation, global headline inflation is expected to continue its gradual decline — from an estimated 4.1 percent in 2025 to 3.8 percent in 2026 and further to 3.4 percent in 2027. While the overall disinflation trend remains intact, the pace differs across regions. US inflation is expected to return to target more gradually than in other advanced economies, reflecting lingering services price pressures and the inflationary impact of trade measures.

Risks to the global outlook remain tilted to the downside. Key concerns include the potential for renewed trade disputes, overvaluation risks in Al-led asset markets if productivity gains fail to materialize, tighter global financial conditions, elevated geopolitical tensions, and uneven growth across emerging market and developing economies. Coordinated multilateral policy action and a de-escalation of trade frictions remain critical to ensuring a more durable global recovery.

Indian Economy Outlook

Indias economy demonstrated strong and broad-based growth momentum in FY26, affirming its status as the worlds fastest- growing major economy. As per the First Advance Estimates released by the National Statistics Office (NSO), real GDP is projected to grow at 7.4 percent in FY26, with Gross Value Added (GVA) expected to expand by 7.3 percent. This robust performance is underpinned by resilient domestic demand, front-loaded government capital expenditure, benign inflation, progressive monetary easing, and improving rural and urban consumption.

The Reserve Bank of India (RBI) revised its FY26 GDP growth forecast upward to 7.3 percent, while the Asian Development Bank (ADB) raised its estimate to 7.2 percent, reflecting the economys stronger-than-anticipated

performance in the first half of the year. Sectoral dynamics have been particularly supportive: the industrial sector is projected to grow at 6.2 percent, led by manufacturing; services continue to expand robustly; and the agriculture sector is estimated to grow at 3.1 percent in FY26, supported by a favourable southwest monsoon. In a significant structural development, the government revamped the GDP calculation framework in early 2026,

updating the base year to 2022-23, which raised the FY26 growth estimate to 7.6 percent under the new series.

On the monetary policy front, the RBI cumulatively reduced the repo rate by 100 basis points between April and December 2025, bringing it to 5.25 percent — one of the sharpest easing cycles in recent history. The MPC retained this rate at its February 2026 review, signalling a neutral-to-accommodative stance. Systemic liquidity remained in comfortable surplus, with broad money growth accelerating to 12.1 percent in December 2025 compared to 9 percent a year earlier. Consumer price inflation remained historically benign throughout FY26 — CPI inflation came in at 2.8 percent in January 2026 under the new 2024 base series — well within the RBIs target band, providing ample policy space.

On the external front, Indias foreign exchange reserves remained robust, gross FDI flows continued to demonstrate Indias attractiveness as an investment destination, and the fiscal deficit is targeted at 4.4 percent of GDP for FY26, reflecting disciplined fiscal consolidation. Looking ahead, Indias medium-term growth prospects are supported by structural reforms, the PLI scheme, GST rationalisation, digital infrastructure expansion, and aspirations to become the worlds third-largest economy in the coming years.

Global Real Estate Outlook

The global real estate market in FY26 demonstrated resilience amid elevated macroeconomic and geopolitical uncertainty, characterised by a structural shift toward quality assets, premiumisation, and sustainable development. Institutional investor sentiment remained broadly positive, underpinned by prior valuation corrections, stabilising interest rates, and strengthening occupier demand in key asset classes. According to Colliers 2026

Outlook, office space demand remained upbeat globally as companies across technology, BFSI, and engineering sectors continued to drive leasing activity, aided by evolving workplace strategies and a focus on amenity-rich commercial developments.

A defining trend of FY26 was the acceleration of demand for premium and luxury residential assets globally. Investors and end-users demonstrated a clear preference for well- located, high-specification properties over generic mid-market product, reflecting a structural convergence of capital, aspiration, and quality. In parallel, alternative asset classes such as data centers, senior living, and co-living facilities attracted growing institutional interest, driven by robust demand, rapid digital adoption, and demographic transitions.

The march toward decarbonisation continued to reshape real estate across geographies. Asset owners and developers face mounting pressure to comply with tightening green regulations and ESG mandates, with underperforming or noncompliant buildings facing meaningful risk of value erosion. This reinforces the strategic imperative for developers like Modis Navnirman Limited to invest in energy-efficient design, sustainable construction, and green certification — not merely for regulatory compliance but as a durable value creation lever.

Global real estate finance also showed early signs of recovery. As borrowing costs gradually stabilised and capital availability improved, institutional investors returned to the market to capitalise on first-mover opportunities, particularly in sectors like logistics, data centres, and high-quality residential real estate. For well- positioned urban redevelopers operating in supply-constrained markets, the global environment provides a strategic tailwind.

Indian Real Estate Outlook

Indias real estate sector maintained strong momentum through FY26, powered by a structural shift in buyer behaviour, sustained institutional investment, policy support, and improving infrastructure connectivity. The sector continues its path toward becoming a US$ 1 trillion market by 2030 and contributing approximately 13 percent to Indias GDP, serving as the countrys second-largest employment driver across residential, commercial, warehousing, retail, and hospitality segments.

• Residential Segment

The residential market in FY26 underwent a decisive transition from volume-driven to value- driven growth. Total housing sales value across Indias top seven cities is projected to touch ^6.65 lakh crore in FY26, a sharp 19 percent jump year-on-year, even as unit volumes remained broadly stable. According to Knight Frank India, homes priced above ^1 crore accounted for 50 percent of total residential sales across the top eight cities in 2025, up from 44 percent a year earlier. ICRA projected new project launches to rise by 6-9 percent in FY26, reaching around 620-640 million square feet across the top seven cities. Average home prices rose by 3-5 percent in FY26, indicating sustained pricing power among organised developers.

• Commercial & Office Segment

Indias office market demonstrated remarkable strength in FY26, crossing 50 million sq ft of gross leasing in the first nine months of 2025 alone — an 8 percent YoY growth. Global Capability Centres (GCCs) drove nearly 40 percent of office space uptake, reinforcing Indias position as a premier destination for high-value business operations. IBEF reported that for the first time, gross leasing in Indias top 7 markets surpassed the 60 million sq ft mark for the full year, reaching 62.98 million sq ft — a 26.4 percent increase over the prior year. India

has firmly established itself as the dominant force in APAC office leasing.

• Investments & Policy Support

Institutional investor participation remained robust, with private equity inflows into real estate reaching approximately US$ 6.7 billion in 2025 — a 59 percent year-on-year increase. Key policy developments include the National Real Estate Policy 2025s introduction of a unified single-window clearance system aimed at reducing project delays by up to 40 percent, 100 percent FDI allowance for township developments, and continued RERA compliance improvements that have strengthened transparency and investor confidence.

Mumbai Real Estate Outlook

Mumbai retained its position as Indias largest and most valuable residential real estate market through FY26, driven by a combination of record sales performance, surging institutional interest, ongoing infrastructure upgrades, and robust demand from HNIs, NRIs, and premium end-users. According to a Liases Foras Survey, FY 2024-25 witnessed the highest-ever residential sales in the citys history at 49,191 housing units worth ^1,24,138 crore — a 26 percent growth from the prior year — seffing a strong base for continued outperformance in FY26.

In FY26, Mumbai accounted for approximately 26-28 percent of all residential sales across major Indian cities on a quarterly basis, reinforcing its status as the countrys most liquid and demand-resilient housing market. The citys average property rate stood at ^26,975 per sq ft — making it Indias most premium housing destination. November 2025 saw 12,283 housing units registered, reflecting a 20 percent annual rise, marking the second-highest November performance since 2013. Home prices in the Mumbai Metropolitan Region (MMR) are forecast to rise by approximately 5 percent, supported by constrained supply,

infrastructure-driven connectivity, and steady aspirational demand.

The most significant market shift in Q1 FY27 is the expansion of the ^1-2 crore mid-market bracket, which grew from 32 percent to 38 percent of all registrations driven by first-time homebuyers benefiting from lower repo rates and new supply in western suburbs. Simultaneously, the luxury segment remains highly active, with 24 percent of luxury buyers now originating from outside Mumbai. Infrastructure catalysts the Mumbai Metro Line expansions, Mumbai Trans Harbour Link (MTHL), Coastal Road, and the upcoming Navi Mumbai International Airport continue to unlock new residential and commercial micromarkets across the MMR.

On the commercial side, Mumbais office market recorded gross leasing volumes of approximately 16.9 million sq ft in 2025, with flexible workspace operators, BFSI, and engineering firms leading demand. Warehousing in the MMR region hit a record 9.6 million sq ft in H2 2025, up 55 percent over H1, reflecting the regions emergence as a key logistics hub. Redevelopment activity — supported by regulatory reforms and scarcity of Greenfield land — continues to be a powerful demand driver for developers operating in the citys densely built micro-markets.

OPERATIONAL PERFORMANCE

Significant Progress across Parameters During fiscal 2025-26, MNL demonstrated remarkable progress in its real estate business across all parameters.

1. Strong Revenue Growth and Sales Momentum:

During FY26, the Company delivered its strongest operational performance, with revenue from operations of ^189.31 crore , representing a robust 84% year-on-year growth over ^102.91 crore in FY25. The Company also recorded the sale of approximately 53,000 sq. ft. during the year, reflecting sustained demand across its

residential portfolio. This performance was supported by efficient project execution, timely handover of completed

developments, and healthy customer demand in key micro-markets.

2. Project Expansion and Development Pipeline:

During FY26, the Company significantly strengthened its development pipeline with the launch of Rashmi Icon , comprising approximately 3.5 lakh sq. ft. of construction area. Along with the commencement of Rashmi Avenue and continued progress across ongoing projects, the Companys total project portfolio expanded to around 7.5 lakh sq. ft. of construction area. The portfolio continues to witness healthy customer demand, with approximately 4.9 lakh sq. ft . already booked, providing strong revenue visibility for the coming years.

3. Strong Delivery:

The Company continued to focus on timely project execution and successfully delivered two redevelopment projects during FY26, namely Rashmi Vasudeo and Rashmi Celes ti a , while maintaining strong construction progress across four ongoing developments. As at year-end, the Company had approximately 7.5 lakh sq. ft . development area under various stages of development, reinforcing its execution capabilities and long-term growth prospects.

4. Long Term outlook:

Modis Navnirman Limited remains focused on expanding its redevelopment portfolio across Mumbais high-demand western suburbs through a capital-efficient and asset- light business model. With a healthy pipeline of ongoing and upcoming projects, disciplined financial management, and a proposed transition to the Main Board of BSE and NSE, the Company is well-positioned to

deliver sustainable growth and create longterm value for all stakeholders.

Budget 2026-27 Takeaways: Building

Foundations for Indias Real Estate Growth

The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, reinforces infrastructure- driven economic growth as the primary mechanism for creating long-term real estate demand. While the Budget does not introduce direct demand-side tax incentives for housing, its focus on capital formation, urban development, and institutional frameworks creates a structurally supportive environment for the sector.

• Infrastructure-Led Real Estate Momentum: Public capital expenditure has been raised to ^12.2 lakh crore in FY27, up from ^11.2 lakh crore in FY26 — a 9 percent increase. This sustained investment in transport networks, dedicated freight corridors, high-speed rail corridors, and urban connectivity is expected to unlock new real estate growth corridors, particularly in tier-II and tier-III cities.

• City Economic Regions (CERs): A major structural reform, CERs receive ^5,000 crore per region over five years to develop integrated urban ecosystems across emerging cities with populations exceeding five lakh. These CERs are designed to become self-sustaining economic hubs, generating demand for residential, commercial, and industrial real estate beyond saturated metropolitan markets.

• REIT Expansion & Institutional Capital: The Budget accelerates recycling of significant real estate assets of CPSEs through dedicated REITs, deepening institutional participation, improving market transparency, and opening new liquidity channels. Municipal bond incentives further strengthen urban

infrastructure financing. These measures collectively signal a maturing of Indias real estate capital markets.

• Infrastructure Risk Guarantee Fund: A new mechanism to strengthen private developer confidence during the construction phase of large infrastructure and real estate projects, addressing a key structural risk that has historically constrained project execution and capital deployment.

• NRI Transaction Simplification: Targeted measures including simplified TDS/TAN procedures for NRI property transactions are expected to ease crossborder engagement, a notably active buyer segment in premium Mumbai real estate.

• PMAY-Urban 2.0 Continuation: Continued allocation of over ^18,600 crore under PMAY-Urban maintains government support for affordable and mid-segment housing, sustaining demand in this category while anchoring social housing delivery.

Opportunities and Challenges

• Demand for Premium Housing:

Premium Demand and Redevelopment Opportunity: Mumbais residential

market has entered a decisively premium phase. The share of homes priced above ^1 crore in total sales rose from 44 percent in FY25 to 50 percent in FY26, with the ^1-2 crore midpremium bracket being the fastest- growing segment in early FY27. For Modis Navnirman Limited, this premium pivot aligns directly with the Companys redevelopment model delivering high-quality, well-located residential products in the MMR that command premium valuations and attract financially stronger buyers.

• Lower Interest Rates Boosting

Affordability: Mumbais 125 basis

points of rate cuts between February 2025 and December 2025 — bringing the repo rate to 5.25 percent — has materially improved home loan affordability. Lower borrowing costs are translating into improved buyer qualification, faster sales cycles, and growing first-time homebuyer participation in the mid-premium segment. This monetary tailwind is expected to sustain demand through FY27, particularly for projects targeting the ^1-2 crore price bracket.

• Digital Transformation in Real Estate Sales: The rapid adoption of digital property platforms, Al-powered chatbots, virtual tours, and augmented reality experiences has fundamentally transformed buyer discovery and engagement. Developers investing in digital-first sales and marketing infrastructure are achieving higher buyer engagement, broader NRI reach, and shorter sales cycles. This digital imperative is an operational priority for the Company as it scales project launches.

• Infrastructure-Driven Micro-Market

Expansion: Ongoing infrastructure

projects — Metro Lines, MTHL, Coastal Road, Virar-Alibag Multimodal Corridor, and the upcoming NMIA — continue to expand Mumbais residential and commercial catchment.

Redevelopment micro-markets in South Mumbai, Western Suburbs, and extended corridors like Thane and Navi Mumbai are seeing consistent demand appreciation driven by connectivity improvements. Modis Navnirman Limiteds focus on strategically located redevelopment projects positions it to benefit directly from this connectivity- driven value accretion.

• Challenges of Affordability and Rising

Costs: Despite favourable macro

conditions, Mumbai remains Indias most expensive property market at an average of ^26,975 per sq.ft — creating structural affordability constraints for first-time buyers and middle-income groups. Rising construction costs, material price escalation, and limited availability of well-located affordable inventory continue to narrow the accessible buyer pool. This necessitates sharper product calibration and strategic pricing to balance sales velocity with margin protection.

• Regulatory and Policy Complexity: The

real estate development process in Mumbai continues to face procedural delays in land acquisition, project approvals, and regulatory clearances. While the National Real Estate Policy 2025s single-window clearance system promises to reduce delays by up to 40 percent, implementation timelines remain uncertain. Additionally, retrospective changes in policy or taxation continue to introduce planning uncertainty developers executing multiyear projects.

Internal Control System

The Company has maintained a robust internal control framework designed to safeguard assets, ensure the integrity of financial reporting, and promote operational efficiency across all critical functional areas. During FY26, the Company continued its investment in upgrading IT infrastructure — encompassing both hardware and software systems to strengthen real-time monitoring, data accuracy, and process automation capabilities.

The Company is actively reviewing and updating its process documentation to ensure the effectiveness of controls across key functional

areas including project management, procurement, financial reporting, and

regulatory compliance. Special emphasis has been placed on ensuring adherence to RERA requirements, investor disclosures, and related- party transaction governance, in line with evolving listing obligations under SEBI.

The Board and Audit Committee remain actively engaged in reviewing the adequacy and operating effectiveness of internal financial controls. Management believes the Companys internal control framework is commensurate with the nature, size, and complexity of its operations, and continues to evolve in step with the Companys growth trajectory.

Human Resources

Your Company remains deeply committed to the health, safety, and professional development of its employees. The Company provides a clean, hygienic, and conducive work environment to all employees, with proactive measures in place for physical and mental wellness. Mental health is recognised as a pillar of sustained organisational performance — the Company aims to optimise the mental well-being of its workforce by creating an environment where individuals think, feel, and act in ways that create a positive impact on their personal and professional lives.

The Company continues to promote gender diversity and equal opportunity, ensuring that women employees at all levels of the organisation are provided meaningful career progression pathways and a respectful, inclusive workplace. The Companys human capital practices remain anchored in the belief that a motivated, skilled, and well-supported workforce is the cornerstone of long-term business excellence

areas including project management, procurement, financial reporting, and

regulatory compliance. Special emphasis has been placed on ensuring adherence to RERA requirements, investor disclosures, and related- party transaction governance, in line with evolving listing obligations under SEBI.

The Board and Audit Committee remain actively engaged in reviewing the adequacy and operating effectiveness of internal financial controls. Management believes the Companys internal control framework is commensurate with the nature, size, and complexity of its operations, and continues to evolve in step with the Companys growth trajectory.

Human Resources

Your Company remains deeply committed to the health, safety, and professional development of its employees. The Company provides a clean, hygienic, and conducive work environment to all employees, with proactive measures in place for physical and mental wellness. Mental health is recognised as a pillar of sustained organisational performance — the Company aims to optimise the mental well-being of its workforce by creating an environment where individuals think, feel, and act in ways that create a positive impact on their personal and professional lives.

The Company continues to promote gender diversity and equal opportunity, ensuring that women employees at all levels of the organisation are provided meaningful career progression pathways and a respectful, inclusive workplace. The Companys human capital practices remain anchored in the belief that a motivated, skilled, and well-supported workforce is the cornerstone of long-term business excellence

Outlook

Modis Navnirman Limited enters FY27 with a firm foundation, supported by favourable macro conditions, a structurally aligned market, and a demonstrated track record of execution in the Mumbai redevelopment space.

Ongoing infrastructure advancements across the MMR, a stable and declining interest rate environment, continued policy support through PMAY and urban development schemes, and sustained institutional confidence in Indian real estate all create a compelling operating environment for the Company.

The structural shift in the Mumbai residential market toward premium and mid-premium housing — a segment in which the Company is directly active — reinforces confidence in sustained demand for the Companys project pipeline. With homes priced above ^1 crore now representing half of all residential sales in the citys top markets, and the ^1-2 crore bracket emerging as the fastest-growing volume segment, MNLs project positioning is well-aligned with evolving buyer preferences.

The Companys strong financial standing, coupled with its reputation for exemplary project execution and its focused presence in Mumbais high-demand redevelopment corridors, positions it favourably to capitalize on the prevailing structural upturn. Management anticipates continued strong sales performance and operational delivery in FY2026-27, driven by a promising project pipeline, disciplined balance sheet management, and a renewed focus on digital engagement and customer experience.

The Company remains attentive to global and domestic risks — including potential trade disruptions, inflationary pressures on construction inputs, and regulatory evolution — and will continue to navigate these with prudence, adaptability, and a long-term orientation toward creating enduring value for all stakeholders.

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.

KEY FINANCIAL RATIOS

In accordance with SEBI (Listing Obligations and Disclosure requirements 2018) (Amendment) Regulations 2018, the Company is required to give details of significant changes (Change of 25% or more as compared to the immediately previous financial year) in key sector specific Standalone financial ratios.

Ratios	FY2026	FY2025	Formula	Change (%)	Reason for change
Trade Receivables turnover	37.45	4.68	Revenue from Operations / Average Trade Receivables	699.95%	Significant increase due to faster collection of receivables and/or lower average trade receivables during the year.
Inventory Turnover	NA	NA	Cost of Goods Sold / Average Inventory	NA	Not applicable as the Company does not hold inventory.
Interest Coverage Ratio	23.28	39.77	EBIT /Finance Cost	(41.46%)	Decrease mainly due to lower EBIT and/or higher finance costs during the year.
Current Ratio	2.09	1.81	Current Assets /Current Liabilities	15.38%	Change is less than 25%; hence no significant variation.
Net Debt- Equity Ratio	0.04	0.03	Net Debt/Shareholders Equity	15.55%	Change is less than 25%; hence no significant variation.
Operating Profit Margin (Adjusted EBITDA Margin) %	23%	21%	Adjusted EBITDA / Revenue from Operations x 100	9.45%	Change is less than 25%; hence no significant variation.
Net Profit Margin %	15%	22%	Profit After Tax /Revenue from Operations x 100	(31.27%)	Decline mainly due to lower profitability during the year.