RDB Real Estate Construction Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian real estate sector continued its upward trajectory in FY 2024 25, supported by strong macroeconomic fundamentals, increased infrastructure investments by the government, and sustained demand across residential, commercial, and retail segments.

The residential segment experienced robust momentum, buoyed by favorable interest rates, rising disposable income, and an increasing preference for home ownership, particularly in urban and semi-urban areas. High-end and luxury housing projects gained significant traction in metropolitan cities and emerging Tier-II locations. A notable contribution came from Non-Resident Indians (NRIs) and affluent domestic buyers, who sought larger and better-equipped living spaces. The commercial real estate sector demonstrated resilience, with continued leasing in Grade A office spaces and growing interest in flexible workspaces. Meanwhile, the logistics and warehousing segments witnessed heightened activity, driven by expansion in e-commerce and reforms in supply chain infrastructure.

Regulatory reforms such as the Real Estate (Regulation and Development) Act (RERA), digitization of land records under the Digital India Land Records Modernization Programme, and housing incentives through Pradhan Mantri Awas Yojana (PMAY) have enhanced transparency, accountability, and investor confidence.

The governments focus on infrastructure development through highways, metro expansion, and smart city initiatives has unlocked growth in peripheral urban centers. Additionally, the Union Budget 2024 25 extended tax holidays for affordable housing and increased home loan interest deductions, further fueling sector growth. Technological advancements played a transformative role. The adoption of PropTech including AI-based property listings, digital site visits, and blockchain-enabled transactions improved operational efficiency and customer engagement. Environmental, Social, and Governance (ESG) factors gained prominence, with developers integrating sustainable practices and green building standards.

The sector remains well-positioned for long-term growth, driven by strong fundamentals, capital inflows through REITs/InvITs, and a more digitized, transparent ecosystem. The Company, having recently acquired the real estate undertaking of the RDB Group through a court-approved Scheme of Arrangement, is strategically placed to leverage these trends and create sustainable value for stakeholders.

Indias real estate sector continues to offer substantial long-term growth potential. Your Company is confident that underlying demand will remain strong, backed by demographics, urbanization, and infrastructure growth. With a well-established brand, modern architectural designs, strategically located projects, and a strong financial foundation, the Company remains a preferred choice for customers and investors.

Key opportunities include: - Expansion in Tier-II and Tier-III cities - Strategic land acquisition for future development - Rising demand in the premium and affordable housing segments However, the Company also faces certain challenges, including: - Scarcity of skilled labor and rising manpower costs - Escalating construction input costs - An over-regulated operating environment

The Company operates under a single primary segment Real Estate Development and Services within the geographical boundary of India. Hence, segment-wise reporting is not applicable.

FY 2024 25 marked a pivotal year for the real estate sector, with strong project deliveries, robust collections, and meaningful business development. Post-pandemic, the industry has shifted towards customer-centric models with a focus on digital transformation and innovation. FY 2025 26 is expected to continue this positive momentum, supported by solid demand, increased affordability, and digital adoption. Developers with strong financials, brand credibility, and execution capabilities are likely to outperform. The Company is optimistic about its diversified project portfolio and remains committed to timely delivery, increased construction velocity, and customer satisfaction. While the sector continues to evolve with regulatory and taxation reforms, success will favor those who adapt proactively to changing market dynamics.

The Company has implemented a comprehensive risk management framework to identify, evaluate, monitor, and mitigate business risks. Regular reviews and updates are conducted by the Board to address emerging concerns. Key risks include: - Interest rate and foreign exchange fluctuations - Pandemic-related disruptions - Project approval and regulatory delays - Customer credit risks and market volatility - Input cost escalation and margin pressures - Changing government policies and demographic shifts - Prolonged working capital cycles

The Company has instituted robust internal control mechanisms covering all operational and financial processes. These controls ensure: - Accuracy and completeness of accounting records - Safeguarding of assets - Operational efficiency - Compliance with applicable laws and regulations Periodic internal audits and management reviews reinforce the control environment. No significant deficiencies were noted during the year. The framework is built upon a clearly defined organizational structure, delegated authority, and formalized policies.

The financial highlight including the operational performance of the Company is stated hereunder, in brief:

The Companys business is managed by a team of competent and passionate leaders. It has a vibrant pool of young and energetic people working as one impeccable team. Transparency in working, open communication and satisfactory work environment are the key intrinsic to RDBs work culture. The Companys focus is on unlocking the people potential and further developing their functional, operational and behavioral competencies. The management allocates sufficient attention in training the workforce to ensure that they are well equipped to take up challenging projects and to ensure their timely delivery by sticking to target schedules.

At RDB Group, there is a firm belief that its professionals are the most important assets and thus, it understands the importance of investing in the growth and development of its employees. It believes that this is crucial, not only for their personal success, but also for the overall success of the organization. Hence, the Company has crafted a comprehensive employees growth and development strategy that aims to empower the workforce, cultivate a culture of continuous learning, and stimulate innovation and excellence throughout the organization. The unwavering commitment is to create a positive work environment that nurtures and supports the professional development of all employees, while striving to achieve the business goals.

Pursuant to the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of key financial ratios along with the reasons for significant changes therein are given below:

Note:

1. Above ratios are based on the standalone financial statements of the Company.

2. Significant change means a change of 25% or more as compared to the immediately preceding financial year.

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, economic conditions affecting demand/supply and price conditions in the domestic market in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors. The Company assumes no responsibility nor is under any obligation to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events.