Oswal Green Tech Ltd Management Discussions

Global Economic Overview

The global economy faced a mixed recovery trajectory during the financial year, shaped by lingering inflationary pressures, geopolitical tensions, and divergent monetary policies across regions. Advanced economies continued their disinflationary path, though growth remained tepid. Meanwhile, emerging markets showed resilience, driven by domestic demand and strong export performance.

The International Monetary Fund (IMF) forecasts global GDP growth to moderate slightly, reflecting the delayed impact of tighter financial conditions and weaker global trade. Central banks in major economies, particularly the US Federal Reserve and European Central Bank, have adopted a cautious stance, prioritizing inflation control over-growth acceleration.

Supply chain stabilization, easing commodity prices, and improved labour market conditions have provided partial relief to global markets. However, risks remain elevated due to ongoing conflicts in Eastern Europe and the Middle East, coupled with renewed concerns over global debt sustainability. Volatility in global capital flows and currency markets remains a concern for businesses operating in developing economies. Global investors are now focusing more on sustainable practices, ESG disclosures, and energy-efficient innovations.

Indian Economy Overview

Despite global headwinds, the Indian economy was remarkably resilient. While growth moderated to 6.5% in FY 2024-25 from 9.2% in FY 2023-24, India retained its position as the fastest growing major economy in the world. Domestic consumption witnessed mixed trends with rural demand strengthening, and urban consumption moderating.

Macro-prudential regulatory tightening of credit in FY 2023-24 led to moderation in personal credit growth to 16% in FY 2024-25, from 27% in FY 2023-24. Consumption demand remained relatively soft during the first half with general elections and peak monsoon. The festive season and Maha Kumbh revived domestic markets in the second half. However, pockets of urban and rural demand are yet to fully recover.

External balances in India saw continued strength in current account with resilient services surplus (current account deficit <1% of GDP). Net services exports clocked another 14% Y-o-Y growth, driven by continued momentum in digital services and Global Capability Centres.

Inflation remained benign, supported by falling food prices, enabling better purchasing power in both urban and rural areas. However, growth deceleration reflects subdued private investment and industrial activity·pose risks to sustained momentum. The Reserve Bank of India maintained a neutral policy stance through the year, holding the repo rate steady at 5.5% amid global and domestic uncertainties.

Industry review

Real estate sector is one of the most recognized sectors globally. The growth of the corporate environment compliments the growth of the real estate sector. The Indian real estate sector performed exceptionally well during the financial year 2024-25, marked by significant growth in both residential and commercial segments. Indias real estate sector attracted robust capital flows, during FY 2024-25.

The office leasing segment reached new highs for gross leasing, particularly in major cities, supported by demand from GCCs and the IT sector. The industrial and warehousing segment continued its growth momentum, fuelled by ‘Make in India, logistics policy reforms, and e-commerce demand. Residential sales across Indias major cities have grown 77% since FY 2019, signalling a strong recovery. Affordable housing faced challenges·Q1 FY 2025 saw a 9% YoY drop in sales, though unsold inventory fell 19%, indicating improved absorption. Luxury housing demand remained strong, particularly homes priced above Rs 1 crore, driven by aspirational buyers and developer focus. The commercial-real estate segment witnessed innovation and diversification, with rising interest in data centres, tokenized investments, and SMREIT.

Overall, the FY 202425 real estate landscape was characterized by sectoral resilience, strong capital mobilization, emerging tech-led business models, and a robust construction base. For Oswal Greentech Limited, this translates into a favorable environment·especially in commercial and industrial segments·with growth opportunities supported by healthy capital flows, technological integration, and policy tailwinds.

Opportunities

Continued government support for affordable housing and infrastructure development presents significant growth opportunities. Strong GDP growth projections and potential interest rate cuts are expected to further boost demand in the real estate sector. Increasing urbanization and favourable demographic trends provide a steady demand for residential and commercial properties.

Challenges

While the management of your Company is confident of creating and exploiting the opportunities, it finds the following challenges:

• Unanticipated delays in project approvals;

• Regulatory hurdles;

• Availability of accomplished and trained labour force;

• Monetary tightening and funding issues;

• Increased cost of manpower;

• Rising cost of construction lead by increase in commodity prices.

Performance overview

The Company is primarily engaged in the business of real estate development and construction activities.

The Companys promoted residential complex project at Ludhiana had successfully sold 464 flats out of 538 flats till the financial year ended March 31, 2025, which can be attributed to a combination of effective sales strategies, market demand and customer satisfaction. Moving forward, the focus will be on maintaining this momentum and continuing to provide exceptional value to both existing and potential homeowners.

Also, during previous financial year, a dispute arose between the Company and the developer of the Centra Greens Township on account of the developers inability to repay the outstanding dues and interest thereon to the Company and subsequently, the developer has offered their share of unsold inventory of 109 flats in the Centra Greens township which comprises of 229770 sq. ft. area in the township along with the management and control of the entire township. Also, in order to settle the ongoing dispute, the Company has invoked the arbitration clause as stated in the agreement executed between the Company and the Developer and the Company has decided not to charge any further interest pending the arbitration proceedings.

Subsequently, on June 3, 2025, the arbitration council delivered its verdict wherein Oswal Greentech Limited has been awarded Rs. 97.17 crores against its total claim of Rs. 472.17 crores, realizing approximately 21% of the claimed amount. The award results in a partial recovery, with a shortfall of Rs. 375 crores not granted.

The Company is in the process of evaluating the arbitral award in consultation with its legal advisors. Based on this review, it will determine the appropriate further course of action.

Real estate project at Barnala, Punjab

The Companys real estate project at Barnala, Punjab which was successfully completed in the third quarter of the financial year 2023-24 and is generating revenue from the sale of plots, marking a significant milestone for the company.

Other Income:

During the year, the Company has also received income from interest on Inter-Corporate deposits (ICDs) and investments in mutual funds.

The financial performance highlights for the year ended March 31,2025, are as follows -

The net income from operations achieved during the year is Rs. 6,595.76 lakh as compared to Rs. 5,560.09 lakh in the previous year. The net profit after tax is Rs. 853.21 lakh as compared to Rs. 637.19 lakh in the previous year.

Discussion on financial performance with respect to operational performance:

During the financial year 2024-25, the companys financial performance showed a improvement, with profit after tax increasing to Rs. 853.21 lakhs from Rs. 637.19 lakhs during the previous year. This increase was primarily driven by higher revenue recognition from completed real estate projects and improved operational efficiency. The Company witnessed better sales velocity and healthy collections across key developments, contributing to improved cash flows. Cost optimization initiatives and prudent resource allocation resulted in higher EBITDA margins during the year. Operational performance was further supported by a strong demand environment, especially in the residential and commercial segments. The companys focused approach to project management, cost control, and sales execution translated directly into financial gains. Overall, the operational achievements during FY 2024-25 laid a robust foundation for continued profitability and sustainable growth.

Risks & concerns

The Company is exposed to specific risks that are particular to its businesses and the environment within which it operates, including inter alia, market risk, competition risk, human resource risk, execution risk and significant downturn in the economic cycle. The company has a comprehensive risk management framework to identify, assess, and mitigate potential risks. Regular monitoring and review of risk factors ensure timely interventions and strategic adjustments to safeguard our interests.

Human resource

Human resource is considered as key to the future growth strategy of the Company and looks upon to focus its efforts to further align human resource policies, processes and initiatives to meet its business needs. The Company has been very proactive to support all its workforce at all the levels in best possible manner. The Company has a continuous process to monitor individual performance. The Company continued to have cordial and harmonious relations with its employees. Training programs, performance incentives, and a conducive work environment are integral to our HR strategy, aimed at fostering a motivated and skilled workforce.

Internal Control Systems and their adequacy

The Company has implemented an internal control framework to ensure all assets are safeguarded and protected against loss from unauthorised use or disposition and transactions are authorised, recorded and reported correctly. The framework includes internal controls over financial reporting, which ensures the integrity of financial statements of the Company and reduces the possibility of frauds.

The Audit Committee of the Board reviwes the design of key processes from the point of view of adequacy of controls. The internal controls are tested for effectiveness, accorss all our projects and functions by the finance department, which is further reviewed by the management of the company from time to time, for corrective action.

Outlook

The outlook for the real estate sector remains optimistic, with anticipated growth in both residential and commercial segments. The company aims to leverage market opportunities through strategic project launches, enhanced customer service, and sustainable development practices. Continued focus on financial discipline and operational excellence will be key to maintaining growth momentum and delivering value to our stakeholders.

Key financial ratios

A comparative table showing a synopsis of the financial year 2024-25 vs. 2023-24 of Key Financial Ratios is provided below:

Risk Management

The Board and its risk management committee take responsibility for the total process of risk management in the organization. The Company follows well-established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board.

The Company takes a very structured approach to the identification and quantification of each risk and has a comprehensive board-approved risk management policy. The scope of the Audit Committee includes review of the Companys financial and risk management policies. The Audit Committee reviews the Audit reports covering operational, financial and other business risk areas.

Disclosure of accounting treatment

The standalone financial statements for the year ended March 31, 2025 have been prepared and presented on a going concern basis under the historical cost convention (except for certain financial instruments which are measured at fair values), on the accrual basis of accounting and comply with the Indian Accounting Standards prescribed by Section 133 of the Companies Act, 2013 (‘the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued there after, other pronouncements of the Institute of Chartered Accountants of India, guidelines issued by Securities and exchange board of India (SEBI) and the relevant provisions of the Companies Act, 2013 (to the extent notified)/Companies Act, 1956.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or are vision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Cautionary Statement

The statements in the Management Discussion and Analysis Report, which may be considered ‘forward-looking statements, within the meaning of applicable laws and regulations, have been based upon the current expectations and projection about future events. The actual results could differ from those expressed or implied. Important factors that could influence the Companys operations include global geopolitical shifts, economic developments within the country, demand and supply conditions in the industry, input prices, changes in Government regulations, tax laws and other factors such as industrial relations. The management cannot, however, guarantee that these forward-looking statements will be realised or achieved.