Shricon Industries Ltd Management Discussions

The investment in the real estate property is one such asset, where the value of your investment increases with time. If a new housing society, main road, or a railway line is connected with your property, then its value multiplies much time more.

Unlike investment in the bonds and shares; where you lose almost all of your money if the stock doesnt go up in the market. On the other hand, investment in real estate property is one of the safest investments. Its value doesnt fall from the sky and you would lose everything.

Even its value does fall, and then you can use your property for other purposes like rents, crops, buildings, etc. In that case, you wont go bankrupt just like it happens with the investment of bonds and shares.

Once you have ownership of your property, then you can do whatever you want to do with your land. Whether you want to cultivate some crops or fields, drill down the land for the oil and gas, or establish some building for the rent or other purposes. You would have complete authority over the use of the land. No other asset would provide you such autonomy over its use.

An inflation hedge is an economic term and it means when the currency of a country starts getting devaluing either because of the macro-economic factors or inflation. Then you invest your capital to protect inflation and investors interests. Assets like real estate property, gold, or silver fall in the category of good inflation hedge that would not only save the country from inflation but also the investor as well.

When you apply for a loan from the financial institution, then the bank would require real estate property to issue you the loan. Even the land isnt providing much value in the open market, but you can still use it as a security to buy a loan from the bank or any other private business owner.

Just like a stock market for bonds and shares, banking industry, or the livestock market for the animals. But you wont see a specific market for the real estate business. Some brokers and agents work in this industry, and their target market is almost everyone.

It doesnt matter whatever your background or field is, you could invest or buy the r eal estate property. As long as you have enough capital and something valuable to trade with, then you are the target market.

When it comes to transferring the ownership of a real estate property, then it involves so many people and other institutions. Sometimes it takes years to transfer the ownership from one generation to next. The more family members and relatives are involved, the longer it would take because you would have to bring everyone on the same page.

The cash is a liquid asset that you can buy anything from anyone anywhere. The real estate property isnt a liquid asset; it means that you have to sell it to make it liquid in order to make purchases that you like.

Sometimes, when it comes to liquefying your real estate asset, the market doesnt provide you the rate that you want. You have to sell your asset at a lower rate in case of an emergency.

When it comes to owning a real estate property, then it is not easy. It requires huge capital and something very valuable to buy the land. Sometimes people work their entire lives and they cant build one house of their dreams.

The supply of land in a country or a region is limited; you cant stretch it out for more people. If the land becomes less for you in a country, then you can move out to other countries. The laws and regulations of other countries dont allow you to own a property easily. You have overcome many hurdles to own land if youre an ordinary person.

Some of the external opportunities that the real estate business could use to its advantage are as follows;

If it wasnt for the land, then no country in the world would have invaded other countries. The fertile beautiful landscape is in great demand across the world because you can use it for production and tourism as well.

The way technology and the mechanical industry is inventing new tools and machinery, the growth and productivity of the fertile land are increasing rapidly. People didnt much care for the land in the past, but now it means profit. Therefore, everyone is in the race of getting a piece of it.

The construction machinery and material have made all kinds of architects and real estate designs possible. However, modern buildings have a great scope of attracting new investors and businesses into your country.

Some of the external threats that are out of the control of real estate business are as follows;

When the economy of the country is in recession, then people start spending less. When people spend less, then it affects badly the overall sale of businesses. As a result, no one would be willing to spend in the real estate property because of the uncertain environments. Economic recession is out of the control of anyone, it takes a lot of time for a country to get out of it.

Real estate is not only a solid asset in the market. There are other assets as well that are even more valuable than real estate. Like gold, silver, oil and gas, wheat, and etc. The most important advantage of such assets is that they are moveable, and you can liquefy it in a market where theyre in great demand. Growth in the other asset means that people wont take real estate assets seriously.

The market of the real estate business is very uncertain. When more people are interested in the property, then its value increases. When people stop showing interest, then its value falls from the sky. For instance, if you need cash instantly and the real estate market is down, therefore, you have to sell it at a very price in such circumstances.

After studying the swot analysis, we have concluded that the real estate business is a great profitable industry. But it depends on many other external factors. Therefore, it is very important to be familiar with all other variable factors before making any purchase decision.

Shricon Industries Limited was incorporated as Bharwaney Builders and Leasing Limited on February 24, 1984 under the Companies Act, 1956 as Public Limited Company in the State of Rajasthan. The name of Company was changed to Shricon Industries Limited on January 31, 1995. The company is engaged in the business of civil work. The Company has leveraged its rich family legacy and business experience to service the real estate needs of mid and lower-income segment of the society.

Economic risk: Slowdown in the global or national economy due to the second and third wave of the pandemic could decelerate the Companys growth.

Mitigation: The pandemic has forced people to stay in their homes during lockdown, leading to the demand for larger homes. The company is optimistic of being able to leverage this reality and increase the carpet area sold, a growth opportunity.