Real Growth Corporation Ltd Management Discussions

The company was engaged in the development of commercial complexes since 2000. In 2007, the
company diversified to another business segment i.e. "Trading Business". The objective of the trading
division was to increase the scope of the business used in construction and real estate industry.
Towards business development, the company will strengthen / establish in ancillary business activities
of Real Estate Industry.

1. ECONOMY OVERVIEW

1.1 Global Economy Overview

The global economy in 2025-26 is expected to experience a period of slower growth, with a
projected slowdown concentrated in major economies like the United States, China, and
Canada. Global GDP growth is projected to slow down, with estimates ranging from 2.8%
to 3.0% for 2025 and 2026, a decrease from the 3.3% growth in 2024. This slower growth is
influenced by factors like trade policy uncertainty, geopolitical tensions, and the lingering
effects of past monetary policy tightening. The slowdown is not uniform. The US and China
are expected to experience significant downward revisions in their growth
forecasts. Heightened trade policy uncertainty and potential trade wars are expected to
dampen global growth. Central banks may need to balance the need to tame inflation with
supporting economic growth.

1.2 Indian Economy Overview

India is anticipated to remain the fastest-growing major economy, with growth forecasts around
6.2% to 6.3%, in 2025-26. Indias economy is projected to grow at 6.3% in the current fiscal
year, outpacing other major economies. Indias growth is attributed to domestic reforms, the
"Aatmanirbhar Bharat" vision, and a strong focus on exports, especially in engineering goods,
electronics, and pharmaceuticals. Digital transactions have seen a massive surge, with UPI
processing a large number of transactions. India has made progress in controlling inflation,
with retail inflation falling to 4.6% in 2024-25. Cumulative FDI inflows have reached
significant levels, with a notable increase in equity inflows.

2. INDUSTRY REVIEW

2.1 Global Real Estate Industry

Global Real Estate Market size was valued at USD 3.9 trillion in 2023 and is poised to grow
from USD 4.11 trillion in 2024 to USD trillion by 2032, growing at a CAGR of 5.5% during
the forecast period (2025-2032).

2.2 Indian Real Estate Industry

The Indian real estate sector is poised for continued growth in 2025-26, driven by strong
demand, policy support, and infrastructure development. While affordable housing sales might
face challenges, overall market activity is expected to remain robust, with a focus on premium
residential and commercial properties. Rapid urbanization, coupled with government initiatives
like the Urban Challenge Fund, will fuel demand for both residential and commercial spaces.

Overall, the Indian real estate sector is expected to maintain its positive trajectory in 2025-26,
with a mix of growth opportunities and challenges. The sectors continued expansion will be
crucial for Indias overall economic growth and development.

3. SEGMENT WISE PERFORMANCE

3.1. Real Estate Segment

The major revenue during the year has been contributed by the Real Estate segment of the
company primarily on account of sale of commercial inventory.

3.2 Trading Segment

During the financial year 2024-25, the Company did not generate any revenue from its trading
segment. This was primarily due to unfavorable market conditions. Further, the results of the
Companys operating segments have been disclosed in Note 31 of the Balance Sheet, in
accordance with applicable financial reporting standards.

4. SWOT ANALYSIS

4.1 Growth Drivers

Measures like increased TDS thresholds for rental income and potential tax benefits for
homebuyers are expected to boost market activity. Increased FDI in the real estate sector,
particularly in townships and settlements development projects, is anticipated. Adoption
of digital technologies in real estate, such as online platforms and virtual property
viewings, will enhance customer experience and streamline transactions. Growing
emphasis on Environmental, Social, and Governance (ESG) factors in project planning
and execution is expected to drive sustainable development. Expansion into smaller cities
with developing infrastructure and lower property costs is likely to gain traction.

4.2 Key Trends

Luxury housing and commercial spaces are expected to see increased demand from both
domestic and foreign investors. While theres a push for affordable housing, factors like
rising costs and affordability pressures may pose challenges in certain segments. The Real
Estate Investment Trust (REIT) platform is expected to attract more global investors,
contributing to the growth of the overall market. Fractional ownership of commercial real
estate is gaining popularity, offering retail investors a way to participate in the market.
Developers are adapting to changing buyer preferences, with a focus on modern amenities,
sustainable construction, and smart home technologies.

4.3 Potential Challenges:

Rising property prices and high mortgage rates may impact affordability, particularly for
first-time homebuyers.

External factors like global economic slowdown or geopolitical instability could impact
investor confidence and market growth.

5. INTERNAL CONTROL SYSTEMS

RGCL has established a robust internal control system that protects all of its assets and assures
operational excellence. The internal control system also assures regulatory compliance and
precisely documents all information regarding the Companys transactions. The internal control
system is totally relevant to the business s type, size, scope, and complexity of operations. The
Company has effective internal financial control mechanisms in place to make sure that
transactions are properly authorised, documented, and reported. Regular internal audits and
checks make sure that operations are carried out successfully. The audit committee is in charge
of establishing and maintaining suitable internal financial controls to guarantee the smooth and
effective operation of its affairs. Periodically, the Audit Committee reviews significant issues
and material weaknesses brought up by the Internal and Statutory Auditors. It is ensured that
prompt and sufficient measures are made to limit the risk and make the necessary corrections

6. FINANCIAL PERFORMANCE

During the financial year under review, your Company achieved a total revenue of ?860.86
lakh, a significant increase compared to ?108.92 lakh in the previous year. The Company also
reported a profit of ?727.64 lakh, marking a substantial turnaround from a loss of ?112.70 lakh
in the preceding year.

Looking ahead, the Company remains committed to strengthening its operations and
maintaining a consistent focus on enhancing profitability in the coming years.

7. HUMAN RESOURCES

RGCL considers its people to be the foundation of the Companys success. The Company takes
great pride in recognizing the success of its human resource, which has always responded with
unwavering dedication to accomplish business growth and market leadership.

The executive leadership serves as the governing force in promoting a progressive workplace
culture. The Company believes in reinforcing the core thrust areas, namely becoming the
employer of choice, fostering an inclusive culture, developing a strong talent pipeline.

8. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS ALONG
WITH EXPLANATION

In compliance with the requirements of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the key financial ratios of the Company have been disclosed
in Note 35 of the Balance Sheet. Further, explanations have also been provided for those ratios
that have undergone a significant change of 25% or more as compared to the previous financial
year.

9. DETAILS OF CHANGE IN RETURN ON NET WORTH

During the year under review, the Company reported a net worth of Rs.1,144.69 lakh, with a
return on net worth of 64%, as compared to a net worth of Rs.417.05 lakh and a negative return
of 25% in the previous year. The significant improvement in financial performance is attributed
to the Companys successful settlement of outstanding dues under a One -Time Settlement
(OTS) sanctioned by Punjab National Bank. The full payment of the OTS not only resolved
legacy liabilities but also contributed to a substantial increase in revenue as well as net worth
during the current year.

10. STATEMENT

This Statement contains forward-looking statements about the business, financial
performance, skills and of the Company. Statements about the plans, intentions, expectations,
beliefs, estimates, predictions or similar expressions for future are forward-looking statements.
Forward-looking statements should be viewed in the context of many risk issues and event that
could cause actual performance to be different from that contemplated in the Directors Report
and Management Discussions and Analysis Report, including but not limited to, the impact of
changes in oil, steel prices worldwide, technological obsolescence and domestic economic and
political conditions. Actual result