Phoenix Mills Ltd Management Discussions

<dhhead>Management Discussion Analysis</dhhead>

Global Economic Overview

The global economy has shown considerable resilience, maintaining steady growth as inflation approaches target levels. Contrary to pessimistic forecasts, the world has averted a recession, the banking sector has shown robustness, and major emerging markets have avoided abrupt disruptions.

For 2024, the International Monetary Fund (IMF) projects a modest enhancement in global economic growth, although it remains below historical averages. This recovery is poised to vary across different regions and sectors, with growth in emerging markets expected to surpass that in developed economies. This progression is supported by a gradual reduction in inflationary pressures and the stabilisation of commodity prices. According to the IMF’s World Economic Outlook from April 2024, global economic growth for 2024 and 2025 is projected to stabilise at around 3.2 percent, with median headline inflation decreasing from 2.8 percent at the end of 2024 to 2.4 percent by 2025.¹

Overview of the Indian Economy

According to National Statistical

Office Estimates, India’s Real Gross

Domestic Product (GDP) grew by 8.4% in the quarter ended December 2023 compared to the same period in scal year 2023, surpassing expectations.² This growth was driven by solid tax revenue, higher government capital spending, resilient domestic demand, including rural areas, and a significant increase in manufacturing and construction, both fuelled by infrastructure investment and real estate.

Note: Real values based on 2011-12 prices for India & 2015 for other countries. All years referred represent Calendar Year. India GDP growth rate for 2023 vs 2022 calculated using data for 9 months (January – September).

Consumer inflation has fluctuated between 5% and 6% but remains within the Reserve Bank of India’s target band. The Wholesale Price Index (WPI), negative from April to October 2023, has turned positive since November. Other indicators, such as repo rates, yields on government securities, and exchange rates, point to macroeconomic stability in India.³

The International Monetary Fund (IMF) has revised India’s GDP growth forecast to 6.8% for scal year 2024/25, up 0.3 percentage points from its January estimate. The IMF’s World Economic Outlook for April 2024 forecasts a robust growth trajectory for India, with projected growth rates of 6.8% in 2024 and 6.5% in 2025 (based on calendar year). This sustained economic expansion is attributed to strong domestic demand and an increasing working-age population.⁴

Positive trends for the Indian economy include strong bank and corporate balance sheets, normalised supply chains, business optimism, and robust government capital expenditure, all contributing to a favourable outlook for the capex cycle. However, private-sector capital investment needs to gain momentum. The Indian economy is expected to grow at 7.6% for the year, significantly exceeding the estimates of many leading global agencies.⁵

Consumer outlook

The outlook for Indian consumer spending appears promising, driven by fundamental factors. Urban consumption is expected to remain strong, supported by falling inflation, improved consumer confidence, and a stabilising labour market. Rural demand is also projected to increase, with forecasts indicating a normal monsoon, leading to greater agricultural output and, consequently, higher rural incomes.

The stable macroeconomic environment, with consumer inflation within the Reserve Bank of India’s target range, contributes to consumer confidence and spending. The government’s robust capital expenditure multiplies the economy, fostering a favourable backdrop for consumer spending. This environment supports the growth of consumer-related sectors like retail, housing, and transportation, driven by manufacturing and construction activity from government infrastructure spending and real estate development.

According to BMI, a Fitch Solutions Company, India’s consumer spending is projected to grow strongly in 2024, with real household spending expected to increase by 6.7% year-on-year, up from the estimated 5.7% growth for 2023. This surge in consumer spending coincides with the broader recovery of the Indian economy, suggesting a return to a more stable medium-term growth trajectory. This positive trend is driven by rising domestic demand and the anticipated rebound in international tourism. While inflationary pressures persist in 2024, they are beginning to moderate. The robust growth in real income for Indian consumers will likely enhance their spending ability, further supporting the increase in household expenditure. These factors collectively indicate a favourable environment for consumer spending in 2024, underscoring a resilient and expanding economy.⁶

Despite ongoing inflation, Indian consumers are expected to retain a cautiously optimistic perspective on spending, especially on non-essential items. Although a possible economic slowdown may curb retail sales growth, the festive season in the latter part of the year is expected to counteract this effect. Furthermore, the burgeoning affluence of the upper middle class is anticipated to sustain the growth in Impact luxury products and retail sectors. This demographic continues to expand its wealth, thereby driving demand for high-end goods and services, a trend likely to persist unabated despite broader economic challenges.

Industry Overview

Retail Industry

The retail sector in India is a vibrant and rapidly expanding industry, ranked as Asia’s third-largest retail market and fourth largest globally after the US, China, and Japan. India’s retail sector saw significant growth in 2023, driven by solid demand and moderating inflation, with the country’s per capita income showing an upward trend. This positive trajectory will continue in 2024 as retailers and consumers maintain a cautiously optimistic outlook. While Tier-I cities are projected to sustain their growth and expansion, several Tier-II markets have also shown considerable potential, emerging as attractive locations for retail development.

According to a Bain and Company report, India’s luxury market is expected to grow to 3.5 times its present size, achieving a USD 85 to 90 billion valuation by 2030. This growth is fuelled by an increase in Ultra-High Net Worth Individuals (UHNWIs), burgeoning entrepreneurship, a vibrant middle class, increased e-commerce penetration, and heightened demand from Tier 2 and Tier 3 cities. Additionally, a recent Wealth Report by Knight Frank predicts a 50% rise in UHNWIs in India within the next ve years. The Credit

Suisse report projects a 105% increase in millionaires in India by 2026. This optimism is why global luxury brands are eager to enter and expand in the Indian market. This indicates that the Indian luxury sector is maturing and progressing robustly.

Moreover, the increasing affluent and elite population underscores India’s attractiveness for retail development and expansion. These factors together lay the foundation for India’s retail sector to reach the USD 2 trillion mark by 2032.¹⁰

Real Estate

According to CREDAI, the Indian real estate market is valued at around USD 300 billion, with a composition of 80% residential and 20% commercial segments. The sector is a crucial pillar of the Indian economy, accounting for 6-8% of its GDP. This highlights the sector’s importance in stimulating economic growth and generating employment, making it a vital component of the country’s broader development strategy.¹¹

The real estate industry offers diverse opportunities, including purchasing property and commercial leasing for Office space, mall space, warehousing, and industrial purposes. The commercial segment has attracted considerable interest from private equity investors, and 2023 marked a milestone year for the Indian residential property market. This year saw a surge in new supply, record-breaking home sales across the top seven cities, and the lowest inventory overhang on record. Consistent economic growth and positive leading indicators helped mitigate global uncertainties, boosting confidence among homebuyers.12

The potential of the real estate sector to drive the Indian economy is significant.

The Confederation of Real Estate Developers’ Associations of India (CREDAI) forecasts that by FY 2034, the industry will contribute 13.8% to the GDP, reaching a market value of USD 1.3 trillion. By 2047, this contribution is expected to increase to 17.5%, with a market size of USD 5.17 trillion. These projections underscore real estate’s critical role in India’s future economic landscape.¹³

Residential Real Estate

Despite concerns about inflation, high interest rates, and a sluggish economy, residential sales in India soared to a 15-year high in 2023. According to the Anarock, the top seven cities sold 4.76 lakh units, up 31% from 3.64 lakh in 2022, highlighting solid market fundamentals. This surge in demand led to rapid growth in residential development, with new launches increasing by 25% year-over-year to 4.45 lakh units, the highest level since 2015.

Ready inventory remains popular among homebuyers, but reputable developers with a strong execution history are attracting interest in their under-construction projects. Prices also saw significant appreciation across the top seven cities, ranging from 10% to 24%—Hyderabad led with a 24% increase, Bengaluru grew by 18%, and MMR and NCR each rose by 15%.

Amidst a thriving economy and ongoing urbanization, which have led to rising household and disposable incomes, there is a noticeable shift in the criteria that homebuyers priorities. This shift is marked by an increased demand for larger homes of superior quality that offer bespoke and customised amenities.

Despite global challenges such as inflationary pressures and rising interest rates, the luxury housing segment achieved remarkable growth in 2023. Sales have quadrupled since 2019 and saw a 75% year-over-year increase. This trend is particularly strong in major cities like Delhi-NCR, Mumbai, and Hyderabad, which together account for more than 90% of the total sales.

The luxury and ultra-luxury segments saw a notable increase in share, contributing 23% of new supply in 2023, up from 17% in 2022, as developers cater to growing demand for luxury projects. However, affordable housing continued to decline, accounting for 18% of total launches in 2023, compared to 26% in 2021 and 40% in 2018.¹⁴

India’s rapidly growing middle and upper classes are a direct result of the country’s strong economic growth and rapid urbanisation. This phenomenon has resulted in a significant increase in wealth accumulation. Cities like Mumbai and Delhi are leading this wealth generation, placing among the top 10 wealthiest cities in BRICS nations for 2024. This trend is establishing India as a prime market for upscale residential and retail real estate investments.

Commercial Office

According to the CBRE 2024 India

Market Outlook Report, India’s Office market is expected to remain strong in 2024 despite global economic uncertainties. Companies will focus on high-quality Office spaces to expand and consolidate operations while emphasising cost ef ciency. The trend towards returning to Offices could also create additional demand. India’s advantages, such as its skilled workforce and well-established business ecosystem, further support this positive outlook, with Office-based employment in major cities projected to grow by 3-5% in 2024.¹⁵

The Office market is poised for a robust supply pipeline in 2024, with new completions likely to increase by 3-5%, driven by high-quality investment-grade assets. Bengaluru, Hyderabad, and Delhi NCR are expected to lead in new completions. Global Capability Centres (GCCs) are anticipated to maintain a significant share of leasing at 35-40%, thanks to the expansion of existing operations and the entry of smaller

rms attracted by India’s strong value proposition.

Technology rms which have been the mainstay of the Office sector are likely to witness growth in the latter half of the year. The BFSI (Banking, Financial Services, and Insurance) and Engineering and Manufacturing (E&M) sectors are contributing to growth, buoyed by India’s talent pool. As they continue digitising, they will elevate demand for large, modern Office parks. Growth is also anticipated from flexible workspace providers, research, consulting and analytics rms, and life sciences companies. These trends collectively suggest a vibrant and evolving Office market in India in 2024.

Retail Real Estate

According to CBRE 2024 India Retail Figures H1 2024, retail leasing in India is expected to remain steady with a healthy mix of primary and secondary leasing. About 0.5 million sq. ft. of space was added in H1 2024, with deferments witnessed on account of 2024 being an election year. This report notes that the retail sector will enjoy a stable demand scenario, with the pace of supply addition across the leading cities likely to dictate primary leasing trends.

According to CBRE 2024 India Market Outlook Report, retail demand across investment-grade malls, popular high streets, and standalone developments has been on an upward trajectory since 2020. In 2023, 7.1 million square feet were absorbed, representing a 47% year-on-year growth in Tier-I cities, with Bengaluru, Delhi-NCR, and Mumbai accounting for about 61% of leasing activity.

Hospitality Industry

ICRA reports that the Indian hotel industry maintained robust performance over the rst 11 months of FY2024 and expects demand to stay robust into FY2025. ICRA projects a 7-9% revenue growth in FY2025 for the Indian hotel sector, following the 14-16% growth anticipated for FY2024. Sustained domestic leisure travel, demand from meetings, incentives, conferences, and exhibitions (MICE), including weddings and business travel (despite a temporary slowdown during the election period), will likely fuel demand in FY2025. Spiritual tourism and Tier-II cities are expected to contribute significantly.

ICRA maintains a Positive outlook on the Indian hospitality sector, with a steady credit ratio and more rating upgrades than downgrades in FY2023 and the

rst ten months of FY2024. About 97% of ICRA’s current ratings have a Stable outlook. The increased demand has prompted a resurgence in new supply announcements and the resumption of deferred projects in the last 18-24 months. However, while the hotel supply is expected to grow at a CAGR of 4.5-5% over the medium term, it is anticipated to lag behind demand.¹⁶

RevPAR and occupancy levels have been trending upward throughout India. This growth is driven by higher disposable incomes and a resurgence in corporate travel, among other macro-economic factors. The increase has been particularly notable in major business centres such as Mumbai, Delhi, and Bengaluru, as well as popular tourist destinations like Agra, Jaipur, and Udaipur.

The travel market in India is projected to reach US$ 125 billion by FY27

International tourist arrivals are expected to reach 30.5 million by 2028.

US$ 2.1 billion is allocated to the Ministry of Tourism in budget 2023-24.

Under the Union Budget 2023-24, an outlay of US$ 170.85 million has been allocated for the Swadesh Darshan Scheme.

Company Overview

About TPML

The Phoenix Mills Limited (‘TPML’ or ‘company’) is India’s leading developer and operator of retail-led mixed-use assets. Our pan India success across various segments (retail, commercial Offices, hospitality and residential) is a testament to our proven track record.

At TPML, our core focus extends beyond traditional real estate development. We are committed to enhancing customer satisfaction, delivering exceptional experiences, and capturing a greater share of the Indian consumer’s time and wallet. This is delivered through world class retail malls, anchored by experiential hospitality or value add commercial Offices which bring every destination to life.

As the Indian economy continues to grow, and the dynamics of urban living evolve, TPML is aiming to capitalise on the emerging trends in discretionary consumption through city centre consumption destinations.

Business Review

Retail Portfolio:

Over the last two decades, TPML has created 12 grand and immersive city centre retail mall destinations with distinct experiences and offerings. Through this journey we understand our consumers better with each passing year. Our iconic retail malls offer a thoughtfully curated and continuously evolving selection of top international, national, and local brands, complemented by diverse dining and entertainment experiences.

We strive to create innovative and captivating experiences with every new retail mall destination and in FY2024, we have done so with the launch of Phoenix Mall of the Millennium at Wakad, Pune and Phoenix Mall of Asia at Hebbal, Bangalore.

In September 2023, we launched Phoenix Mall of the Millennium, our second city centre destination in Pune which has a retail mall Gross Leasable

Area (GLA) of ~1.20 msft. It offers over 350 national and international brands providing an excellent shopping experience, over 75 diverse dining options and an entertainment zone of over 1 lakh sq. ft. with attractions like a unique Fan Park, TimeZone, FunCity and a 14-screen Megaplex. Apart from the shopping, dining and entertainment experiences, this mall boasts of stunning architecture featuring three unique atriums, a mesmerizing musical fountain, and captivating art installations. Trading occupancy at this mall has seen fast ramp up from 44% at launch to 77% in April 2024. This ramp-up translated into strong performance as consumption (retailer sales) for FY2024 at this mall was 331 crores, with a trading density (consumption per sq. ft. carpet) of 1,074 per sq. ft. crossing the 1,000 per sq. ft. mark in the rst partial year of operations itself.

This was followed by the launch of Phoenix Mall of Asia, our second city centre destination in Bangalore, in October 2023. Spread over a Gross Leasable Area of ~1.20 msft, this mall is an architectural masterpiece, with each floor capturing a distinctive theme, promising the visitors a unique and visually enthralling experience. Trading occupancy at this mall saw a fast ramp up from 43% at launch to 67% in April 2024. This ramp-up translated into strong performance as consumption (retailer sales) for FY 2024 at this mall was 293 crores, with a trading density (consumption per sq. ft. carpet) of

1,196 per sq. ft. crossing the

1,000 per sq. ft. mark in the rst partial year of operations itself.

Both these malls commenced operations with strong footfall and achieved the USGBC LEED Certi cation with Gold Rating in FY 2024, underscoring TPML’s commitment to sustainability.

Retail Project Pipeline

Following the successful launch of Phoenix Mall of the Millennium and Phoenix Mall of Asia, we are set to expand our retail presence to Kolkata and Surat by launching new retail assets which are currently under construction. Further, we are also densifying our existing properties in Mumbai and Bangalore by adding new areas. Through addition of new malls and densi cation of existing assets, we plan to increase our operational retail space by ~3 million square feet, taking our operational retail GLA to ~14 msft by 2027 from ~11 msft today.

Projet	City	GLA
Retail block opposite PR (Phoenix Palladium Mumbai)	Mumbai	~0.25 msft
Retail portion of the commercial Office-led mixed-use development in Lower Parel (Project Rise)	Mumbai	~0.20 msft
Retail expansion at Phoenix MarketCity Bangalore	Bangalore	~0.10 msft
Phoenix Grand ictoria, Kolkata	Kolkata	~1.00 msft
Retail Destination, Surat	Surat	~1.00 msft
Total		.00 msft

Operational Highlights

We believe in delivering experiences and going above and beyond the shopping centre concept. As active mall operators, we continue to undertake asset upgrades, optimize the existing mall area, preimmunize the brand mix and elevate consumer offerings across our portfolio to boost growth.

Elevating experiences

In our quest to ensure that every customer visit is a remarkable and thrilling experience and to infuse our spaces with constant energy and allure, our dedicated team tirelessly curates and sources captivating installations and d?cor. From welcoming in a new season through a seasonal d?cor refresh, to themed d?cor, we are constantly seeking fresh concepts to captivate our patrons’ attention and spark their curiosity.

Consumption across our Retail Portfolio FY2024.

We have a carefully curated event calendar, across the year. During FY 2024, we organized various shopping themed events, such as Electronics Festival, Phoenix Luxury Shopping Festival, Ethnic Festival, Jewellery Festival and so on.

We also curated entertainment events such as Holiday Land Festival, Lego Land, chess tournaments, food festivals and various music concerts, stand-up comedy nights, screening of sports events etc to add to the fun.

Brand mix enhancements:

At Phoenix Palladium Mumbai, we launched a larger Zara store, in a new format and the flagship store of Nature’s Basket Artisan Pantry. Phoenix Palladium also saw the launch of Chanel Fragrance & Beauty, Laura Mercier, Jacob & Co, Polo Ralph Lauren to name a few. Further, we expanded the F&B offering at this mall, with the launch of the globally acclaimed F&B Brands – Paul and Pret-a-Manger etc.

At Phoenix MarketCity Mumbai, we enhanced the brand mix with the launch of the rst Uniqlo store in Mumbai, and the launch of Tim Hortons, Blue Tokai, The Beer Caf? etc, which also helped improve the F&B Mix at this mall. The launch of Game Palacio (bowling, arcade, and dining) and Play and Learn further strengthened the Family Entertainment Centre (FEC) offerings.

At Phoenix MarketCity Pune, we optimized a part of the area by leasing out a block of approx. 18,000 sq. ft. GLA, which was non-revenue generating previously to a strong FEC and F&B brand, which would add to the consumption and rentals going forward.

FY 2024 Retail business performance

These initiatives across the portfolio, led to ramp up in trading occupancy across the malls and growth in Consumption (retailer sales). FY2024 Consumption across our retail portfolio reached an all-time-high of 11,344 crores in FY24, with a growth of 23% compared to FY23, led by strong, double-digit growth in Phoenix MarketCity and Palladium Chennai, Phoenix MarketCity Kurla, Phoenix Palassio Lucknow and the ramp up across the four new malls.

Ourfinancial performance mirrored this success, with FY24 retail rental income at 1,660 crores, up by 27% and FY24 retail EBITDA at 1,673 crores, up by 25%.

Commercial Office Portfolio

Our Grade A commercial Offices (Non-IT/ITES) are a cornerstone of our mixed-use development strategy, which is centred around vibrant retail spaces. These commercial front Offices cater to diverse occupiers from various industries and are seamlessly integrated with our retail properties. This creates a dynamic ecosystem where the occupiers Benefit from well-designed infrastructure, amenities, and ample parking. Beyond the practical advantages, being part of a retail hub offers unique perks. Tenants can hold work meetings in non-traditional settings outside their Offices or unwind with colleagues after hours, fostering stronger connections.

The addition of the commercial Office component in the mixed-use development allows us to get the most out of the development potential of the land parcels, the built infrastructure and offer a delta in terms of return on costs as against a typical commercial Office only development, which needs to drive returns on overall development on its own without any other anchor development component in a mixed-use

Commercial Office Portfolio

We are set on a path to expand our commercial Offices portfolio by adding over 5 million square feet of commercial Office spaces adjacent to our existing malls in four cities. By 2027, we aim to operate approximately 7 million square feet of commercial Office GLA, increasing from the 2 million square feet currently.

Projet	City	GLA
Phoenix Asia Towers	Bangalore	~1.20 msft
Phoenix Millennium Towers	Pune	~1.20 msft
Palladium Offices	Chennai	~0.40 msft
		~1.10 msft
ISML Offices	Bangalore
		Phase 1: ~0.40 msft
Project Rise	Mumbai	~1.10 msft
Total		.00 msft

Key Operational Highlights

During FY2024, gross leasing increased to ~530,000 sq. ft. from ~431,000 sq. ft done in FY23. Of this, new leasing accounted for ~360,000 sq. ft. while renewals accounted for ~170,000 sqft. The improvement in leasing led to an increase in occupancy to ~70% as of March 2024, compared to ~63% in March 2023. Total income from commercial Offices increased by 12% to 190 crores in FY2024 vs.

170 crores in FY2023 and Asset EBITDA improved by 13% to 110 crores in FY2024 vs. 98 crores in FY2023. EBITDA Margins remained stable at 58%.

Residential Portfolio

Our premium residential housing offerings allow us to further capitalise on India’s dynamic consumption landscape. Our luxurious properties, strategically situated in Bangalore, cater to the sophisticated needs of a growing affluent consumer base. These elegantly designed residences combine modern amenities with impeccable style, making them desirable to discerning buyers. This move not only broadens our portfolio but also reinforces our commitment to providing exceptional living experiences in some of the most sought-after locations in India.

Residential Project under Development

Projet	Saleable Area	City
Residential Project	~1.00 msft	Kolkata

Key Operational Highlights

During FY 2024, we sold ~250,000 sq. ft. area and witnessed significant growth in our performance, with gross sales booking of 566 crores, up 21% from 466 crores in FY 2023. Collections in FY 2024 stood at 646 crores, up 75% y-o-y. We have also been able to gradually take price hikes in the portfolio, with the average selling price at 24,000 per sq. ft. as of March 2024, which is 50% higher than

~ 16,000 per sq. ft. as of March 2020.

Hospitality Portfolio

TPML’s hospitality portfolio includes two premier hotels with 588 keys: The St. Regis, Mumbai and the Courtyard by Marriott in Agra. Both establishments have become leading performers in their respective categories, emerging as valuable assets with self-sustaining and increasing operating cash flows.

Hospitality Portfolio under Development

Projet	Keys	City
Grand Hyatt	Up to 400	Bangalore

Key Operational Highlights

In FY2024, our hospitality portfolio delivered an exceptional performance, achieving a record revenue of 546 crores. This success is a testament to rising occupancy rates and robust

financial performance across our hotel properties.

The St. Regis Mumbai had an outstanding year, with a 23% increase in Average Room Rates (ARR) from 14,851 in FY 2023 to 18,247 in FY 2024.

Occupancy for FY2024 stood at 83%. Total income for FY24 was 491 crores, representing a 21% increase compared to FY2023. Furthermore, it achieved its highest-ever operating EBITDA of 223 crores, a 24% growth from FY2023. Operating margins improved from 45% in FY2023 to 46% in FY2024. The Courtyard by Marriott in Agra also experienced notable growth in performance, driven by higher occupancy levels.

Occupancy at this asset grew to 78% in FY 2024 vs. 72% in FY 2023. Average room rates also saw a 10% increase and stood at 5,278 in FY 2024.

Its total income climbed to 55 crores, marking an 18% increase over FY2023.

EBITDA for FY2024 was 16 crores, a 42% growth from 11 crores in FY 2023. Operating margins improved from 24% in FY 2023 to 29% in FY 2024.

We are working on and investing in elevating both these assets through upgrades of look and feel, offerings and plushness to get the most out of the upcycle in hospitality and maintain the string hold in the markets we are present in.

Key Land Acquisitions:

During November 2023, TPML through its wholly owned subsidiary, Sparkle Two Mall Developers Private Limited acquired a prime land parcel located at the Majiwada Junction in Thane. This land parcel admeasuring ~11.50 acres was acquired at a consideration of

~ 429 crores. While the development mix at this land parcel is currently being

finalized, the asset launch will form a part of our next ve-year plan, beyond

2027.

During April 2024, TPML through Island Star Mall Developers (a TPML – CPP J Entity) acquired a prime land parcel of ~6.6 acres, located adjacent to the currently operational Phoenix

MarketCity Bangalore, in White eld. This land was acquired at a consideration of ~ 230 crores (including stamp duty and registration). Currently under design and planning stage, this acquisition strengthens TPML’s commitment to the Bangalore community and positions TPML for future growth.

Financial Overview

Income from Operations:

On a consolidated basis, revenue from operations increased to 3,978 crore in FY2024, marking a 51% growth from FY2023.

Rental income from malls amounted to

1,660 crore for FY2024, a 27% increase from FY2023.

Income from commercial Offices was

190 Crore, up 12% from FY2023,

Revenue from our operating hotels portfolio reached 546 Crore, growing 21% over FY2023.

Revenue recognised from the residential segment was 877 Crore. It is pertinent to note that the recognised revenue pertains to only the towers having received completion certi cates per accounting standards. During FY2024, Tower 7 of One Bangalore West achieved the Occupation Certi cate, which enabled us to recognize revenue from the sales pertaining to this tower.

From a standalone perspective, which encapsulates operations of Phoenix Palladium Mumbai (including commercial Office spaces), operating revenue stood at 466 Crore in FY2024, with a marginal decline of -2% over FY 2023.

Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA):

The consolidated EBITDA is 2,177 Crore in FY2024, reflecting a 43% growth over FY2023.

On a standalone basis, the EBITDA is

312 Crore, showing a marginal decline of 3% compared to FY2023.

EBITDA margins on a standalone basis remained stable at 67%, unchanged from FY2023.

However, EBITDA margins have declined marginally by 300 basis points on the consolidated front, now standing at 55%.

Interest and Depreciation

Standalone depreciation and amortisation increased to 35 Crore in FY2024, up 13% from 31 Crore in FY2023. On a consolidated basis, depreciation and amortisation rose 19% year-on-year, reaching 270 Crore in FY2024, compared to 228 Crore in FY2023. This increase is attributed to the expansion of the operational portfolio, including the launch of two new malls in FY2024.

Standalone gross debt increased from

654 Crore in FY2023 to 720 Crore in FY2024. However, interest expense on a standalone basis declined by 2%, from 66 Crore in FY2023 to 65 Crore in FY2024. On the consolidated front, gross debt increased from 4,259 Crore in FY2023 to 4,612 Crore in FY2024. Interest expense also rose to

396 Crore in FY2024, driven by the rising cost of borrowings and additional debt raised during FY24.

Profit After Tax and Minority

Interest

Standalone Pro t After Tax increased to

280 Crore in FY2024, up from

242 Crore in FY2023, after adjusting for exceptional items. Consolidated

Pro t After Tax in FY2024 stood at 1,333 crores.

Balance Sheet

Share Capital

In FY2024, the share capital of our Company was 36 Crores. Standalone reserves and surplus increased to 5,023 Crore in FY2024, up from

4,819 Crore in FY2023. Consolidated reserves and surplus grew to 9,422 Crore in FY2024, compared to 8,344 Crore in FY2023.

Non-Current and Current Liabilities (including Debt Position)

Standalone non-current (long-term) borrowings increased to 617 Crore in FY2024, up from 426 Crore in FY2023. The consolidated non-current (long-term) borrowings increased to 3,813 Crore in FY2024, up from 3,310 Crore in FY2023. Consolidated current liabilities, on the other hand, have declined to 2,245 Crore in

FY2024, compared to 2,579 Crore in FY2023. Our Company maintains a strong liquidity position, with ~99% of the debt backed by annuity income from operational assets. With Net Debt to EBITDA at ~1.1x and interest coverage ratio at ~5.5x, at consolidated level, our company stands on rm ground with room to expand further.

Fixed Assets

Net block excluding investment property under construction increased to 13,137 Crore in FY2024, up from 10,964 Crore in FY2023. Investment property under construction declined to 1,503 Crore in FY2024, compared to 2,295 Crore in FY2023.

Current Assets

Cosolidated total current assets decreased to 3,387 Crore in FY2024, down from 3,393 Crore in FY2023, indicating improved rental collections. Meanwhile, consolidated inventories have also reduced to 782 Crore in FY2024 from 1,212 Crore in FY2023.

Particulars	FY24	FY23	YoY Change
Debtors turnover ratio	14.7x	11.1x	33%
Inventory turnover ratio	5.1x	2.2x	134%
Interest coverage ratio	5.5x	4.5x	24%
Current ratio	1.5x	1.3x	15%
Debt Equity ratio	0.4x	0.4x	-3%
Operating pro t margin	55%	58%	-3 percentage points
Net pro t margin*	34%	56%	-22 percentage points
Return on Networth*	11%	13%	-2 percentage points

*Pro t after tax for FY2023 includes a one-time exceptional item of 605 crores

Human Resources

Digitisation of Performance Management

In FY2024, TPML revamped its digital performance management system (PMS). This new system facilitated a structured approach for employees and managers to set Speci c, Measurable,

Achievable, Relevant, and Time-bound (SMART) goals. This platform enhanced collaborative goal setting between managers and employees, boosting employee engagement and ownership of their objectives. The performance appraisal process was also fully digitised, streamlining assessments and feedback.

Employee Training Initiatives

To maximise the effectiveness of the new PMS, employees and managers received speci c training on goal setting and performance evaluation to ensure a smooth transition to the digital system. Senior employees participated in in-person workshops titled "Crucial Conversations" to enhance performance assessments. Furthermore, TPML conducts yearly Prevention of Sexual Harassment (POSH) and Anti-Bribery and Corruption (ABC) trainings to reinforce its commitment to a respectful and ethical workplace.

Employee Wellness Initiatives

TPML remains committed to supporting employee wellness through various initiatives. During the year, we introduced a weekly doctor-on-site across our properties and organized webinars on diet, nutrition, mental health, and overall well-being. In December 2023, we held our rst virtual Townhall Meeting, a significant event, where the senior management had the opportunity to share their experiences and strategic vision with all employees. A dedicated Q&A session allowed employees to engage directly with leadership, improving communication and understanding. This initiative fostered greater transparency, enhancing organisational culture and morale.

For an in-depth understanding, please refer to page no. 102 of this this report.

Risk Management and Internal Control

The Phoenix Mills Ltd. operates in a multifaceted and dynamic market environment influenced by economic, regulatory, technological, social, competitive, and environmental factors. To successfully navigate these challenges, we have implemented a comprehensive risk management framework that continuously identi es, evaluates, and mitigates potential risks. Our key focus areas include economic fluctuations, inflationary pressures, regulatory changes, intense competition, cybersecurity threats, and climate change. For instance, to counter economic slowdowns and inflation, we maintain a diverse portfolio across retail, commercial Offices, hospitality, and residential segments, focusing on prime urban locations and strong liquidity positions. Additionally, our cost management strategies, rent escalations indexed to inflation, and investments in energy-ef cient practices help optimize operational ef ciency and tenant value.

In the regulatory landscape, we ensure robust compliance through a dedicated team of experienced legal professionals that stays abreast of policy changes, thus enabling proactive adaptation and positive societal engagement. During the year, TPML partnered with an agency, to implement a centralized platform for tracking and addressing legal and compliance-related issues across different functions.

For an in-depth understanding of our risk management and mitigation strategies, please refer to page no. 24 of this this report.

Our internal control systems play a crucial role in maintaining operational integrity and compliance. The Board of Directors oversees an effective system of internal controls through a continuous process of risk identi cation, evaluation, and management. External agencies provide independent reviews to ensure the adequacy and effectiveness of these controls. Additionally, significant investments in IT infrastructure enhance our cybersecurity measures and operational excellence. By embracing technological advancements, we optimize property management and customer engagement, ensuring we remain at the industry’s forefront.

Information Technology Infrastructure

Our commitment to a robust IT infrastructure is critical for maintaining stable and streamlined operations. Over the past few years, we have made significant investments to build a solid foundation equipped with best-in-class IT systems, enabling us to manage administration ef ciently and deliver services. We have developed a centralized system that integrates accounting functions and supports comprehensive management decisions while allowing for the effective management of each property as an individual unit. This system aligns with global standards in information automation, performance metrics, and management excellence. Our advanced IT infrastructure facilitates the generation of various business intelligence reports, which are essential for investment management, electronic procurement, paperless transaction processing, budgeting, forecasting, and cash flow modelling.

During the year, to strengthen our Information Technology controls, we appointed external security consultants to perform risk assessments, gap analyses, and introduce new IT security tools based on identi ed needs. We also revised and rolled out comprehensive Information Technology policies for the organization, ensuring all users adhere to best practices. Other initiatives include deploying a managed detection and response system, to ensure zero vulnerabilities and prevent cyber-attacks, implementation of tools to address vulnerabilities and eliminate potential security loopholes, conducting phishing simulations, to name a few.

These initiatives underscore our dedication to continuously strengthening our IT infrastructure, ensuring we remain at the forefront of technological advancements while maintaining the highest standards of security and ef ciency.

Outlook

During FY2024, TPML delivered strong performance across verticals leading to strong operating cash flows adjusted for Interest paid of 1,781 crores (up from 1,404 crores last year). These funds will be deployed towards the ongoing capital expenditure at various assets, asset enhancement initiatives at operational assets, acquisition of land parcels and debt reduction, thus strengthening ourfinancial position and setting the stage for continued growth and excellence. We enter FY2025 with cautious optimism, backed by our strong performance in FY2024.

Between November 2023 and April 2024, we completed two key land acquisitions and are actively evaluating more opportunities. These acquisitions will form a part of our launch pipeline beyond 2027.

Retail: FY2025, will be the rst full year of operations for our recently launched malls – Phoenix Mall of the Millennium and Phoenix Mall of Asia. We will also work towards ramping and stabilizing of operations at Phoenix Citadel (which crossed trading occupancy of 90% in FY2024) and Palladium Ahmedabad, in addition to the two malls mentioned above. We are set to operationalize ~250,000 sq. ft. of additional retail space at our flagship asset Phoenix Palladium Mumbai in FY 2025. These initiatives, combined with strategic brand mix enhancements, increased F&B and entertainment offerings, and asset upgrades, will help to drive consumption (retailer sales) and improved pro tability across our retail portfolio.

Commercial We continue to work towards leasing our operational Office portfolio in Mumbai and Pune during FY2025. Higher occupancies at these properties, will drive additional income, improve operational ef ciencies and support retail consumption at our malls – Phoenix MarketCity Mumbai and Phoenix MarketCity Pune, which are integrated with the Office developments.

Meanwhile, the construction of Phoenix Asia Towers in Hebbal, Bangalore is complete, and we are poised to launch the project upon obtaining the

Occupation Certi cate.

Hospitality: We continue to focus our efforts on maximization of operational ef ciency and revenue by enhancing guest experiences and elevating our F&B offering across our hotels. Our operating hotels have consistently achieved record-high performance and are expected to deliver better results in FY 2025.

Residential: We expect strong momentum in sales to continue, at our assets in Bangalore, where we have inventory of ~450,000 sq. ft. remaining to be sold. Further, we have about ~0.60 msft of inventory which is yet to be launched and constructed at Bangalore; in addition, we have ~1 msft of luxury premium residences at Alipore, Kolkata which are currently under product design and approval phase.

FY 2025 promises to be another year of growth for our company. Through strategic acquisitions, expansions, operational improvements and focus on sustainable practices, we aim to continue driving our leadership forward in India’s real estate sector.

Cautionary Statement

This document contains forward-looking statements regarding anticipated future events andfinancial and operational projections for The Phoenix Mills Limited. These statements are inherently speculative and involve assumptions subject to significant risks and uncertainties. There exists a considerable risk that the predictions, assumptions, and other forward-looking statements will not materialise. Readers are advised not to place undue reliance on these forward-looking statements, as various factors could cause actual results and events to differ significantly from those projected. Consequently, this document should be read in conjunction with the disclaimer. It should be considered fully informed by the assumptions, quali cations, and risk factors discussed in the Management Discussion and Analysis section of The Phoenix Mills Limited’s Annual Report for FY2024.