ozone world share price Management discussions

1. OVERVIEW OF THE ECONOMY

The Indian economy has proven to be remarkably resilient in the face of deteriorating global situation. India will be the fastest-growing economy among the seven largest emerging markets and developing economies, despite a challenging external environment, said the World Bank in its global economic prospects report. The World Bank stated in its "Navigating the Storm" report in November 2022 that Indias economy is relatively insulated from global spillovers compared to other emerging markets. This is partly because India has a large domestic market and is relatively less exposed to international trade flows." Indian economy is expected to be the fastest growing major economy worldwide at 6.5-7% for the year ending March 2023.

Indias growth continues to resilient despite some signs of moderation in growth, says World Bank in its latest India Development Update, the update notes that although significant challenges remain in the global environment, India was one of the fast-growing economies in the world. The World Bank has forecasted GDP growth at 6.3% for the Financial Year 2023-24

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

Real estate sector is one of the highest employment generators after agriculture sector in India. It comprises Residential, Office, Retail, Hospitality and Industrial. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. It will contribute 18-20% to countrys GDP by 2030 according to a joint report by NAREDCO and E&Y. The report further states that there is a favorable demand-supply gap which will propel the growth of this sector. Additional 25 million units of affordable housing are required by 2030, highlights the Naredco and EYjoint report.

With the rise of the corporate environment, the demand for office space and urban and semi-urban accommodation has increased, assisting the growth of this business. Emergence of nuclear families, rapid urbanization and inflating disposable income of individuals are attributable to the higher demand for residential properties, expanding e-commerce sector in the country is catalyzing demand for warehousing facilities. The industry has faced a series of challenges like rising construction costs, skyrocketing inflation, successive rate hikes by RBI etc but despite these obstacles, the sector managed to achieve substantial growth in recent. According to a report, Indias real estate market is expected to exhibit a growth of rate (CAGR) of 9.2% during 2023-28.

3. OPPORTUNITIES AND THREATS OPPORTUNITIES

The residential real estate market continued its upward trajectory in FY23 (sales growth of 15% year- on-year for the top eight real estate clusters) despite pressure from higher input costs, increasing mortgage rates, and the domestic and global recession," according to India Ratings and Research (Ind- Ra). Ind-Ra expects the sales momentum to continue and housing sales to increase by 9% year over year, supported by a steady, healthy demand. Affordable housing continues to remain a significant opportunity for developers and key focus area of the Government. The Government continues focus on the affordable housing and the budget 2023-24 includes 79,000 crores for PM Awas Yojana (PMAY) houses. This represents a 66% increase over the previous year.

This will provide opportunities to developers to enter in this segment. Demand for leasing space from IT, ITes and retail business is expected to increase. E-commerce and third party logistic will continue to invest in warehousing, making it one of the fastest growing commercial real estate segment providing more opportunities for developments. Redevelopment of existing society buildings is also providing huge opportunities in the sector particularly in II tier Cities.

THREATS

The Indian real estate sector is still highly unorganized with lots of middle men and, together with increased construction costs - both material and labour which has been putting pressure on the cost of projects and profit margins.

Non-availability of land within city limits along with rising land and construction costs, making affordable housing projects unviable.

The lengthy and complex approval process leads to a high gestation period which eventually results in project costs escalation and any amendments in various rules and regulations can adversely impact new launches and increase in the cost of the projects. Retrospective applicability of policy changes may impact the profitability.

Acute shortage of skilled workforce at all levels.

Increase in supply due to various incentives provided by the Government, leads to increased competition amongst the sellers, which drives down the property prices.

4. OUTLOOK

The rising demand for residential properties, along with the growing infrastructural development that provides enhanced connectivity via roads, air, and railways, is primarily driving the India real estate market. The Indian real estate market is expected to exhibit a CAGR of 9.2% during 2023-2028. Moreover, the increasing need for contemporary office spaces and the emerging trend of urban and semi-urban lodging are acting as other significant growth inducing factors. Furthermore, the expanding ecommerce sector in the country is catalyzing the demand for warehousing facilities, which is providing a positive thrust to the market. Besides this, with the growing use of telecommunication services and the implementation of 5G and data localization norms, there is a rise in the need for data storage facilities. This, in turn, is positively influencing the demand for resilient data center infrastructure and consequently bolstering the market growth.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate system of internal control procedure commensurate with its size and nature of the business so as to ensure that all assets are safeguarded from loss, damage or disposition and ensure that all transactions are authorized, recorded and reported correctly and adequately. All operations parameters are periodically monitored and strengthened. The Company continuously upgrades these systems in line with best accounting practices. The internal control system is further supplemented by a programme of internal audit conducted by an independent firm of Chartered Accountants. The Audit Committee of the Board of Directors reviews the effectiveness of internal controls and suggests improvements for strengthening them whenever required.

6. HUMAN RESOURCES

Employees are the key to achieve the Companys objectives and strategies. The Company provides to the employees a fair equitable work environment and support from their peers with a view to develop their capabilities leaving them with the freedom to act and to take responsibilities for the tasks assigned. The Company strongly believes that its team of capable and committed manpower, which is its core strength, is the key factor behind its achievements, success and future growth. We are continuously working to create and nurture an organization that is highly motivated, result oriented and adaptable to the changing business environment. The industrial relations remained cordial during the year.

7. TO CONTINUE EXPANDING OUR BUSINESS BY INCLUDING NEW SERVICES:

We intend to explore opportunities to expand our operations by developing new verticals within our existing lines of business. Further expanding our offerings will help us to build on existing diversification of our business.

8. CAUTIONARY STATEMENT

The statements in this report on "Management Discussion and Analysis", describing the Companys objectives, estimations, expectations or projections, outlook etc., may constitute forward looking statements within the meaning of the applicable Rules, Laws and Regulations. Actual results may vary from such expectations, projections etc., whether express or implied. These statements are based on certain assumptions and expectations of future events over which the Company has no direct control.

	For and On Behalf of Board of Directors
	sd/-	sd/-
	Hiten Manilal Shah	Sejal Sanjiv Shah
	Managing Director	Executive Director
	(DIN 09520190)	(DIN 09591841)
Place: Ahmedabad
Date: 05/07/2023