Shriram Properties Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

The Companys leadership in core markets hinges on in-depth knowledge of industry dynamics, micro-market trends and customer needs. Over the years, it has cultivated a robust portfolio that showcases its expertise and market acumen.

This leadership is not just about market share; it reflects the Companys ability to anticipate trends, adapt swiftly and consistently exceed expectations.

Company overview

A LEGACY OF EXECUTION EXCELLENCE

With over 25 years of experience in real estate development, Shriram Properties Limited (SPL) has successfully delivered 48 projects, encompassing 27.6 msf of development. Today, 21,000+ happy families reside in Shriram Properties homes, and 10,000+ customers have chosen us for their dream home in our ongoing projects. Our ever-growing family now comprises 31,000+ members and continues to grow. The Companys legacy is not just in brick and mortar-it is in every family who found their dream home with it.

A professionally managed business with governance steering the operational excellence

The Company is a team-led, process-driven, and professionally managed organisation. Trust, transparency, and governance are integral to its culture. The Company ensures clear accountability at all leadership levels.

The name, Shriram Properties Limited, symbolises integrity, and the Company upholds this reputation in every decision it makes.

An agile, asset-light, partnership-led model

SPLs focus on an asset-light model has been a game-changer in a world where agility and efficiency are paramount. This approach has allowed the Company to leverage strategic partnerships, optimise operational efficiency and maintain financial flexibility. By minimising capital expenditure and maximising returns, the Company has positioned itself for sustained growth and profitability.

BUILDING ENDURING PARTNERSHIPS WITH MARQUEE INVESTORS, LANDOWNERS AND FINANCIAL INSTITUTIONS

SPLs success relies on the foundation of longstanding and mutually beneficial relationships with marquee investors, landowners, and financial institutions. These partnerships have provided the Company with the resources, insights, and support necessary to execute its ambitious projects and drive its strategic initiatives.

ROOTED IN STRENGTH

Deep roots build strong foundations. SPLs strength is not just in numbers but in its values, resilience and trust built over decades.

A bold new identity: repositioning for the future

The year under review (‘FY25) marked a strategic turning point as SPL adopted a refreshed brand identity that aligns with the evolving aspirations of todays urban homebuyers. Transitioning from its earlier focus on mid-market and affordable housing, the Company is now firmly positioned in the mid-market and mid-premium segments-the fastest-growing categories in the Indian residential rea estate sector.

SPLs vibrant new identity, supported by a sharper brand language and customer insight-driven communication, reflects its modern outlook. This evolution enhances the Companys connection with homebuyers and strengthens its presence in its core markets.

MARKET LEADERSHIP IN THE MID-MARKET SEGMENT

With this repositioning, SPLs objective is clear: to establish market leadership in the mid-market and mid-premium housing segments. These segments are not only aligned with the Companys capabilities but also represent the deepest and fastest-growing pockets of residential demand in India, especially in its core markets of Bengaluru, Chennai, Pune and Kolkata.

The Companys sharpened customer focus, enhanced design sensibilities, improved digital presence and stronger brand recall are all geared toward achieving this leadership aspiration. SPLs ability to deliver value-rich, well-designed and timely-executed projects significantly differentiates it in this competitive landscape guided by its brand ethos, which is articulated in the 4S framework, which stands for ‘Sensible, Sensitive, Stylish and Spirited. Together, these reflect the Companys brands character, purpose and quality, all of which set the SPL brand apart from the rest of the competition. Banking on these fundamental precepts helps bring the brand identity alive in SPLs communications and interactions, internally and externally, with all stakeholders including customers, employees and partners with equal effectiveness.

SPLNXT: THE COMPANYS GROWTH CHARTER FOR FY26-FY28

To give shape to this new brand philosophy and renewed market ambition, SPL has launched a focused three- year growth mission SPLNxt - that lays down bold, measurable goals targeted for FY28, over FY25 baseline:

• Double pre-sales value

• Triple revenue recognition

• Quadruple profits

This growth mission is not just aspirational-The strategic blueprint is in place, the organic mobilised, and robust project pipelines, stror discipline and improved customer orientatioi the roadmap.

By the end of this three-year transformation Company envisions itself as a redefined orga credible, stronger and formidable force in the residential housing space.

RISING WITH PURPOSE

Growth with direction. Expansion with intent. SPLs ambition is not merely to rise higher-it is to rise with purpose, creating lasting value for its customers, partners and stakeholders.

Industry landscape

RESILIENT INDIAN ECONOMY

FY25 unfolded amidst a stable macroeconomic environment. Despite global headwinds, the Indian economy remained resilient, driven by healthy consumption and infrastructure-led growth. The residential real estate sector sustained its upward momentum, driven by urban migration, lifestyle aspirations and a shift in consumer preferences towards quality housing.

During the year, India became the fourth-largest economy globally, in 2025, driven by domestic reforms and global positioning. India is the worlds fastest-growing major economy, with its real GDP growing at a rate of 6.5%. India will likely be the worlds fastest-growing major economy, even during FY26.

(Source: Press Information Bureau)

From achieving historic GDP growth and record exports to revolutionising digital payments and empowering millions through financial inclusion, India has laid the foundation for a resilient, equitable and future-ready economy. With robust FDI inflows, expanding trade and innovation-driven sectors leading the charge, India is no longer a passive participant in the global economy; it is a key architect of its future.

EXPANDING MIDDLE-CLASS POPULATION AND RISING DISPOSABLE INCOMES

The middle-class population in India is typically defined as households with an annual income between Rs.5 lakhs and Rs.30 lakhs, characterised by discretionary spending and aspirations for better living standards. Indias middle class has emerged as a major economic force, propelling growth in consumption and shaping market trends According to recent studies, India will likely become the third-largest consumer economy globally by 2030, with consumer spending projected to increase from $2.4 trillion in 2022 to $6 trillion. (Source: IBEF)

Indias per capita disposable is projected to reach $4,210 by FY29 (Source: IBEF). This growth is indicative of Indias rapid economic transformation, fuelled by rising job creation, increased workforce participation and a growing urban population. The expanding middle class, which will likely dominate consumption patterns, has emerged as a key driver of this upward trend.

Promising prospects and trends

INDIAN REAL ESTATE SECTOR

The Indian real estate sector demonstrated remarkable resilience during the year, overcoming global challenges to perform commendably across various segments; though, growth remained limited due to a lack of new launches. While the sector continued to grow, it faced challenges in obtaining approvals for launches and securing occupancy certificates promptly, due to prolonged administrative delays.

Backed by investor confidence and adaptive consumer behaviour, the sector remains a key economic pillar, set for continued momentum in FY26, driven by urbanisation, infrastructure growth and technology integration.

Real estate is a globally recognised industry. Flousing, retail, hospitality and commercial are its four sub-sectors. The expansion of the business environment, the need for office space and the desire for urban and semi-urban housing contribute to the rise of this industry. In terms of direct, indirect and induced effects on all economic sectors, the construction industry ranks third out of 14 key industries. After the agricultural sector, the real estate industry is the second-largest employer in the country.

The growing middle-class population, along with rising disposable incomes, are key to the migration of this category of population from rural to urban areas to seek a better standard of living. The Indian real estate market is undergoing a wave of premiumisation as buyers seek properties that combine luxury, comfort and sustainability.

FROM LIVEABILITY TO LIFESTYLE: INDIAN REAL ESTATE TRENDS

Indias consumer landscape is undergoing a remarkable transformation, driven by demographic changes, economic growth and evolving aspirations. The shift towards premiumisation reflects deep-seated socioeconomic trends, as consumers transition from prioritising value for money to embracing quality, innovation and aspirational products.

• Rising demand for premium housing: Developers are creating projects equipped with private pools, home automation systems and personal assistant services. According to Knight Franks report, homes priced at Rs.1 crores and above saw a significant rise in sales, accounting for a substantial 41% of total sales in HI of CY24.

• Integrated townships: Integrated townships with schools, hospitals and entertainment centres appeal to urban families.

• Smart homes: Features like loT-enabled appliances, automated lighting and voice-activated controls are key selling points for premium real estate projects.

• Sustainable living: Green buildings with eco-friendly designs, water recycling systems and energy-efficient technologies are gaining traction among environmentally conscious buyers.

INDIAS MID-MARKET EVOLUTION

Residential sector poised for growth: The Indian residential market is poised for growth, driven by robust end-user demand, healthy economic fundamentals and favourable home loan interest rates.

Mid-market dominance in launches: The mid-market and mid-premium segments continued to maintain their position as significant contributors across India.

At a pan-India level, 54% of the launches were in the mid-market and mid-premium segment. At the core market level, these segments accounted for 71% of the launches in Bengaluru, 73% of the launches in Chennai, 47% of the launches in the Kolkata and 71% of the launches in Pune, underscoring the strong demand for mid-market products. (Source: PropEquity)

Mid-market surge - the new growth engine: The mid-market and mid-premium housing segments are rapidly emerging as the new growth engines of the Indian real estate sector, driven by growing end-user demand, urban migration and rising aspirations of the middle class. Tier-1 cities are at the forefront of this shift, backed by developing employment hubs, robust infrastructure upgrades and improved access to home financing. As homebuyers seek a balance between affordability and lifestyle, this segment is uniquely positioned to deliver value, making it a key focus area for developers and a catalyst for sustainable urban development.

Expected price stabilisation: After significant price increases in CY24, residential prices will likely stabilise in CY25. Moderate but steady growth is likely, driven by high input costs and robust demand, which will keep the market primarily end-user driven.

SALES PERFORMANCE

Sales value: CY24 for the residential real estate sector has been a year of stabilisation on the backdrop of unprecedented growth in CY23. The home sales value soared to Rs.5.68 lakhs crores in CY24 from T4.88 lakhs crores in CY23, witnessing a 16% growth in CY24, mainly due to a sharp rise in prices and broader market trends influenced by elections and the escalation of input costs. However, Q4 FY25 witnessed a sharp decline in sales of 28% y-o-y due to approval-led delays that impacted launches, resulting in supply-side constraints. (Source: Anarock research)

Sales volume: The residential market across the top seven cities in India experienced a relatively moderate growth trajectory in CY24. The number of residential units sold in the top seven cities remains muted, with substantial growth, reaching a total of 4.6 lakhs units sold in CY24, compared to 4.7 lakhs units sold in CY23. (Source: Anarock research)

DEMAND DYNAMICS

Demand trends: The Indian residential property market has demonstrated resilience despite high interest rates and property prices. The demand remained buoyant, supported by factors such as urbanisation, demographic shifts and homebuyers continuing to view real estate as a preferred investment avenue, as well as aspirational homeownership trends.

Supply volume: New supply across the top seven cities was 4.12 lakhs units in CY24 compared to 4.46 lakhs units in CY23, indicating 7% y-o-y decline. CY24 launch trends indicate a measured approach by developers in launching new inventory to maintain market equilibrium, with approval-led launch delays observed during the year. (Source: Anarock research)

INVENTORYTRENDS

Inventory levels: CY24 ended with 5.53 lakhs units of unsold inventory, witnessing a decline of 8% from the end of CY23, primarily attributed to strong demand and relatively restricted new supply. (Source: Anarock research)

Inventory overhang: Inventory overhang for residential properties stood at 14 months at the end of CY24, showing improvement from 15 months at the end of CY23. Declining inventory levels point towards market efficiency and better alignment between supply and demand, contributing to overall market stability. (Source: Anarock research)

PRICING TRENDS

Stabilisation in pricing: Housing prices in Indias top eight cities increased by 7% annually. This significant price appreciation, supported by healthy housing demand and stable borrowing rates, underscores the markets resilience and its ability to withstand economic fluctuations.

SPLs core market trends and outlook

As the Indian real estate sector enters FY26, a new wave of disruptions and directional shifts is reshaping the landscape.

Rapid expansion of the middle class, evolving consumer aspirations, and robust economic fundamentals are driving this transformation, accelerated by technology adoption, changing urbanisation patterns, ESG imperatives and regulatory reforms. ;

This evolving landscape is reshaping investor strategies and end-user preferences. Investors are pivoting towards future-ready, high-quality assets across diversified geographies, while end users are demanding smarter, more sustainable and lifestyle driven spaces. This shift is redefining real estate value creation for the next growth cycle.

BENGALURU

Bengalurus residential market demonstrated robust performance in CY24, with new launches reaching 71,000 units, marking a significant 30% y-o-y growth from CY23. The sales momentum remained positive, reaching 65,200 units, a modest 2% increase compared to the previous year. This launch-sales dynamic indicates strong developer confidence.

Trends

Tech workforce driving demand: Bengalurus robust IT ecosystem continues to anchor residential growth.

Tech professionals favour smart, mid-premium homes with proximity to employment zones. Demand is concentrated around Outer Ring Road (ORR), Electronic City and Hebbal-areas offering robust digital infrastructure, connectivity and readiness for hybrid work lifestyles.

Lifestyle-led product differentiation: Buyers are gravitating toward developments offering wellness zones, co-working pods and branded amenities. SPLs new launches, such as Shriram Serenity, integrate such lifestyle features-catering to aspirational buyers, nuclear families and tech-native millennials prioritising convenience, safety and community living.

Expansion into growth corridors: Enhanced connectivity through metro lines and Satellite Ring Road (STRR) is accelerating residential interest in Sarjapur, Doddaballapura, and Hoskote. SPLs plotted and vertical developments in these corridors are positioned to leverage this demand shift, offering affordability with long-term appreciation potential.

Outlook

Bengalurus residential market is poised for sustained growth in FY26, buoyed by the citys resilient IT-ITeS sector that continues to drive housing demand. The recent RBI repo rate reduction has enhanced affordability and may stimulate buyer interest. While infrastructure development in peripheral micro-markets remains challenging, several metro line extensions and improved connectivity projects are likely to unlock new residential corridors. While affordability concerns persist due to supply chain pressures and rising construction costs, Bengalurus fundamental demand drivers remain strong, with the work-from-office trend reinforcing housing requirements near employment hubs and positioning the market for resilient performance through FY26.

CHENNAI

Chennais residential market demonstrated mixed performance in CY24, with launches showing modest growth, while sales experienced a decline. New residential launches reached 20,522 units in CY24, representing a 6% increase compared to CY23.

Trends

IT/lTeS sectors influence: Chennais IT corridor-from Guindy to Sholinganallur-continues to drive housing demand among professionals. Proximity to offices, digital infrastructure and ease of commute remain key decision factors, supporting the growth of compact and smart mid-market housing in these employment-dense zones.

Premium pulse in urban core: Theres a noticeable shift toward premium developments in city-core areas like the Central Business District. SPLs launches in these zones tap into rising demand for better-located, high-amenity homes-driven by young professionals, senior executives and affluent local families.

Infrastructural unlocking new markets: Major infrastructure projects such as Metro Phase-ll and ORR upgrades are catalysing residential demand in suburban zones like Thirumazhisai and Perungalathur.

Outlook

Chennais residential market outlook for FY26 appears promising, as the city will benefit from significant industria investments and infrastructure development. The recent repo rate cut is likely to catalyse home loan demand.

The western micro-markets and those near the IT corridor along Old Mahabalipuram Road (OMR) are experiencing heightened residential activity due to improved connectivity. Developer consolidation continues, with established players commanding premium pricing while maintaining steady sales velocity in plotted developments and apartments. Overall, the citys relatively stable price points compared to the remaining top six cities, combined with end-user-driven demand, suggest resilient market performance ahead.

KOLKATA

The citys growing IT, finance and professional services sectors are driving demand for upgraded living spaces, fuelling a premium housing boom. Launches experienced a 28% decline in CY24 compared to CY23. Approximately 14,7674 units were launched in Kolkata in CY24. On the other hand, sales remained flat at 18,595 units, increasing by a margin of 1%.

Trends

End-user driven market dynamics: Kolkatas residential demand is anchored in end-user preferences for affordability, community living and long-term ownership. Stable buying patterns and family-centric decisions continue to drive demand for 2-BHK and 3-BHK units in familiar neighbourhoods with social infrastructure.

Connectivity-led demand pockets: Improved connectivity through metro expansions and elevated corridors is boosting demand in eastern and southern fringes like Garia, Eastern Metropolitan Bypass and Rajarhat. These emerging corridors are attracting interest from first-time buyers and value-conscious investors.

Predictable and value-based growth: Kolkata remains a value-centric market with steady absorption, low volatility and slower price cycles. This stability enables phased development strategies.

Outlook

Kolkatas residential market is showing signs of revival in CY25, benefitting from improved connectivity through metro expansions and the recent reduction in lending rates. The citys eastern and southern micro markets are witnessing increased residential development activity.

While challenged by limited commercial growth compared to other metropolitan cities, Kolkata offers compelling value propositions with its relatively affordable housing options. While some concerns about construction quality persist in certain areas, established developers are raising standards through quality assurances. Redevelopment projects in central parts of the city and the gradual transformation of older properties add fresh inventory to the Kolkata residential market.

PUNE

Pune is the newest addition to the Companys portfolio and has been one of the fastest-growing residential markets of India. Absorption continues to outpace supply in Pune; however, the city saw a notable shift in supply with 70,848 units, experiencing a decline in launches. On the other hand, sales demonstrated resilience in absorption at 92,643 units. More than half of the supply and demand is inclined towards mid-market segments, with a ticket size ranging from C50 lakhs to Cl crore.

What makes Pune such a lucrative real estate proposition Rs.

Punes real estate market has witnessed steady growth over the years, offering excellent return on investment (ROI). Pune contributes more than 17% of pan-India sales in terms of number of units (Source: PropEquity). Pune saw the sharpest decline in inventory overhang among the top seven cities, reflecting healthy absorption trends. Punes infrastructure development is a key factor driving real estate appreciation. Unlike chaotic metro cities, Pune offers a perfect blend of urban convenience and natural beauty. With its pleasant climate, clean environment and abundance of green spaces, Pune ranks among the most liveable cities in India.

Trends

IT/lTeS sectors influence: Punes major IT hubs-Hinjewadi, Kharadi and Magarpatta-continue to drive residential demand among tech professionals. Proximity to workplaces, metro corridors and evolving social infrastructure fuel the rise of mid-segment and premium apartments in these employment clusters.

Premium pulse in urban core: Core areas like Koregaon Park, Kalyani Nagar, Baner and Aundh are witnessing increased traction for high-end residences. Affluent homebuyers and senior professionals are driving demand for larger, lifestyle-rich homes in well-connected upscale neighbourhoods.

Infrastructure unlocking new markets: Ongoing metro expansion, Pune Ring Road and improved road networks are opening up suburban zones like Mahalunge, Wagholi, Ravet and Moshi. Integrated townships and mixed-use developments in these corridors are seeing accelerated uptake, supported by affordability and transit connectivity.

Outlook

Punes residential market will likely maintain its impressive growth trajectory, establishing itself as a preferred destination for end-users and investors. The IT-ITeS expansion and the manufacturing/industrial sector will likely drive consistent housing demand. Educational institutions and the growing startup ecosystem will likely reinforce housing demand. Developers will likely focus on creating community-centric living environments with enhanced amenities and sustainable features. Infrastructure developments, including the metro rail network and the progress of the Ring Road, will likely improve connectivity and unlock new growth corridors. While rising land costs present challenges in prime micro-markets, Punes residential market will likely experience stable growth throughout CY25.

Operational highlights

A YEAR OF RESILIENCE AND PERFORMANCE

The year under review was a testing year for SPL, given the external challenges. Yet, the Company demonstrated agility and strength, achieved 4.3 msf of sales, generating Rs.2,28,815 lakhs sales value, and achieving a record collection of Rs.1,48,434 lakhs. The Company handed 3,150+ homes and completed nine projects spanning 4.3 msf, reaffirming its commitment to timely delivery and customer satisfaction.

Steady sales value and volumes: SPL clocked a sales volume of 4.3 msf and sales value of Rs.2,28,815 lakhs. These sales were primarily driven by ongoing projects and supported by robust offtake in our recent launches. Buoyant demand in our core markets led to healthy momentum despite the odds of approval-led delay impacting launches during the year.

Record-high collections: During the year, SPL recorded its highest-ever gross collection of Rs.1,48,434 lakhs.

Due to significant milestone achievements and successfu handovers, the Companys collections have shown a healthy improvement compared to the previous financial year.

Timely execution: Staying true to its reputation of delivering quality projects on time/ahead of timelines, SPL made significant progress in project execution, with nine projects reaching completion, both residential and plotted development. These projects accounted fora total saleable area of 4.3 msf. Adhering to committed timelines under RERA regulations, the Company ensured that construction progress remained seamless, meeting customer expectations and delivering projects on time.

Record-high handovers: Despite the prolonged administrative process in receiving completion certificates (CC/OC) and e-Khatha in certain of our projects across geographies, the handover team weathered the storm by handing 3,150+ units during FY25, witnessed greater momentum during Q4. Annual customer handovers in excess of 3,000+ units for second consecutive year reflects the ramp-up in execution capabilities. The handover process significantly improved upon receiving occupancy or completion certificates for key projects. SPL added a feather to its cap by delivering -1,400 units to customers within 30-45 days during the last quarter. SPLs committed efforts and seamless coordination allowed it to achieve this milestone.

Successful execution of non-core land asset monetisation strategy: SPLs land monetisation efforts commenced with the successful sale of a non-core land parcel located in Chennai. This approach reflected a strategy to unlock value from its non-core assets, generating cash flows for the Companys envisaged aggressive growth. SPL expects land monetisation efforts even in other cities, augmenting cash flows during the three-year mission period the Company has set for itself.

Healthy cashflow from operations: Reflecting on execution excellence and strong project collections, SPL generated Rs.30,500 lakhs in cashflow from operations. During the year, the Company invested around Rs.14,300 lakhs in new projects and ended the year with a cash balance of Rs.31,994 lakhs. This performance provides a promising start to FY26, enabling the utilisation of cashflow for operations and new project investments.

Resilient financial performance: Banking on record-high handover rates and the timely completion of crucial projects, SPL ended the year with total revenues of Rs.97,338 lakhs, an EBITDA of Rs.20,283 lakhs (including the share of JV profits), and a PAT of Rs.7,730 lakhs. Consequently, the Company reported its highest-ever net earnings after getting listed.

FINANCIAL HIGHLIGHTS

Particulars	March 2025	March 2024
Financial performance
Total income ( Rs. lakhs)	97.338	98,735
EBITDA* ( Rs. lakhs)	20.283	20,326
Profit before tax ( Rs. lakhs)	8,790	7,638
Net profit ( Rs. lakhs)	7,730	7,542
Earnings per share ( Rs.)	4.53	4.44
Book value per share ( Rs.)	80	75
Financial performance ratios
Operating margin (%)	30%	34%
EBITDA margin (%)	21%	21%
Net profit margin (%)	8%	8%
Balance sheet ratios
Return on capital employed	9%	11%
Return on net worth	6%	6%
Net debt-equity ratio	0.24	0.35
Current ratio	1.46	1.47

TOTAL INCOME

Revenue from operations totalled Rs.82,344 lakhs, driven by income recognition in recently completed projects, including Shriram Park 63, Shriram Grand One, Shriram Chirping Woods, Shriram Liberty Square and Shriram Pristine Estates. During the year, SPLs revenue recognition momentum was impacted in Q2 and Q3 due to delays in receiving occupancy certificates, which were resolved by the end of Q4, affecting revenue recognition momentum. However, a significant portion of the lost momentum was recouped during Q4, resulting in a satisfactory conclusion to the financial year.

The Companys top five projects contributed 85% of its project revenues. SPL realised Rs.912 lakhs in development management (DM) fees and administrative income during the year. DM revenues were lower due to the completion of DM projects in the current year and are expected to improve with upcoming launches.

SPLs gross margins remained healthy at 30% in FY25, driven by revenue recognition from the Shriram Liberty Square, Shriram Pristine Estates, Park 63, Shriram Grand One and Shriram Shankari projects.

The Companys other income results from the monetisation of economic interests in certain projects, gains from the monetisation of land, final settlements with landowners on ongoing projects, interest income from joint ventures and the write-back of certain liabilities that are no longer required.

OPERATING EXPENSES

The cost of revenues amounted to Rs.57,494 lakhs, representing expenses directly linked to income recognition during the year. These included costs associated with obtaining occupancy certificates, executing customer registrations, completing handovers, and the corresponding construction outlays. Employee expenses stood at Rs.9,247 lakhs, marking a 6% y-o-y increase, primarily attributable to standard annual salary revisions. As of March 31, 2025, the Company had 665 employees on its rolls.

Our other operating expenses totalled Rs.12,665 lakhs, primarily comprising advertising and sales promotion, legal and professional charges, repairs and maintenance, rates and taxes and insurance.

EBITDA

EBITDA for the year at Rs.20,283 lakhs in FY25 reflected an EBITDA margin of 21%. Income recognition from critical projects, improved operating leverage and ongoing cost control efforts drove this growth.

However, EBITDA growth remained muted during the year on account of deferral of revenue recognition to FY26. SPL is on track to stabilise its EBITDA margin around the mid-20s.

During the year, over 26% of handovers were registered in projects operating in joint ventures. To reflect the impact adequately, EBITDA has been recomputed to include the share of profits from the joint venture (JV).

26% of FY25 handovers fell under the JV category.

With handover gaining momentum in recently completed phases of ongoing projects: Shriram 107 SouthEast and Shriram WYTfield has contributed for healthy contribution to share of profit from JVs.

FINANCE COSTS

The Companys overall finance costs reduced by 11% y-o-y at Rs.10,458 lakhs in FY25.

Interest costs decreased during the year reflecting scheduled debt repayments. Interest expenses primarily comprised interest expenses payable on term loans and non-convertible debentures related to project working capital requirement.

The finance costs include a non-cash charge of Rs.1,635 lakhs related to the unwinding discount on land cost payable in Kolkata (disputed royalty payable to the Government of West Bengal).

Importantly, SPLs cost of borrowings has been on a declining curve. As of March 31, 2025, it stood at 11.3%. And recent rate cuts announced by the RBI will likely lead to more savings in interest costs in FY26 and beyond SPLs share of profit from joint ventures stood at Rs.2,351 lakhs during the year.

TAX EXPENSES

The Companys tax expenses, including current taxes, and those tax relating to previous years as well as deferred tax, amounted to Rs.1,060 lakhs for the year.

NET PROFIT

SPL recorded net profit of Rs.7,730 lakhs, which is its highest ever since listing, though muted on y-o-y basis due to deferral of certain revenue recognition in certain projects on account of delayed receipt of completion certificates.

STRATEGIC OUTLOOK

Premiumisation and brand repositioning: As premiumisation increasingly shapes real estate trends, SPL is well-positioned to cater to the evolving aspirations of next-generation homebuyers. The Companys refreshed brand identity marks a strategic shift from value housing to aspirational mid-premium homes, enhancing its visibility and appeal within the mid-premium segment.

Laying a strong foundation for Mission 2028: FY26 marks the beginning of SPLs journey towards achieving the goals enumerated under its Mission 2028. A focused and strategic business development approach is central to building an extensive pipeline, which will serve as the launchpad for aggressive, sustainable growth in the coming years.

Capitalising on mid-market and mid-premium growth opportunities:

The Indian residential real estate sector is entering a multi-year growth phase, driven by robust demand across mid-income and aspirational segments. With market consolidation favouring established players, SPL is poised to strengthen its position and scale operations by leveraging these structural tailwinds.

Deeper penetration in Pune: Following the encouraging response to its maiden launch in Pune, SPL is doubling down on its expansion strategy in this high-potential market. The Companys objective is to make its presence felt in Punes mid-market segment and move towards market leadership through focused launches and brand-building initiatives.

Leveraging a scalable operating platform: SPLs robust and integrated operating platform-powered by effective sales and execution capabilities-remains a key enabler of growth. With continued investments in systems, talent and processes, the Company ensures that its platform remains scalable and agile, supporting rapid expansion into new geographies and segments without compromising efficiency or quality.

SCOT analysis

I STRENGTHS

Proven sectoral repute: SPL has established a credible brand in the residential real estate sector in cities such as Bangalore, Chennai, Kolkata and recently in Pune. The Company strives to utilise its seamless track record in the real estate industry to attract more customers and instil trust and confidence in the market. SPL will capitalise on its proven brand equity to differentiate itself from competitors and position itself as a preferred choice for homebuyers.

Seamless execution track record with a focus on customer satisfaction: Over the last 25 years, SPL has demonstrated an enviable track record by completing over 48 projects, spanning over 27.6 msf of area. The Company has not only delivered projects, but also crafted curated experiences for its customers. Each project showcases the Companys commitment to quality and timely delivery.

Professionally managed excellence with stringent governance: Over the last two and a half decades, the Company has demonstrated its commitment to fair and transparent business practices. The Companys governance structure seeks to ensure transparency, accountability and ethical business practices.

SPL strives to uphold the highest standards of corporate governance, which has earned the trust of investors and customers. The Company is managed by professionals with in-depth expertise in their respective domains, which strengthens its operational performance.

Scalable and growth-oriented business model:

The Company focus on an asset-light model has been a game-changer in a world where agility and efficiency are paramount. This approach has allowed it to leverage strategic partnerships, optimise operational efficiency and maintain financial flexibility. SPL has positioned itself for sustained growth and profitability by minimising capital investment and maximising returns. The Companys success is built on the foundation of enduring, collaborative relationships with marquee investors, landowners and financial institutions.

These partnerships have provided the Company with the resources, insights and support necessary to execute ambitious projects and drive strategic initiatives.

SPLs asset-light business strategy has been a key factor in ensuring the robustness of its balance sheet, driven by adequate liquidity and access to financing.

The Companys debt-equity ratio of 0.24x is among the lowest in the industry.

OPPORTUNITIES

Changing consumer preferences and value perceptions:

Indian consumers today place a high value on sustainability, authenticity and quality. Urban consumers transitioning from price sensitivity to value sensitivity present opportunities for credible brands like SPL, which has been striving to deliver value homes and create an exceptional customer experience.

Rapid urbanisation and influx towards branded players:

Urbanisation leads to better employment opportunities and higher incomes, increasing the purchasing power of the urban population. As more people migrate to cities, there is a growing demand for residential housing. This need encompasses affordable housing for the urban poor and middle class, as well as luxury housing for the affluent. Urbanisation also boosts the rental market, as not all migrants can afford to buy properties immediately.

This trend creates a steady demand for rental housing, benefitting developers and investors. The growing preference for Tier-1 cities among branded developers drives demand for large, listed companies. SPL is a branded player that predominantly operates in Bangalore, Chennai and Kolkata and has recently forayed into Pune, seeking to leverage the trend of urbanisation.

Capitalise on the early success and gain further momentum in Pune market: With early success visible in Pune following SPLs maiden launch of the project codenamed Superstar, it opened up numerous opportunities, captured untapped demand and expanded its customer base. The Company can achieve significant growth and enhance its competitive position by strategically approaching the new market and addressing its unique characteristics and needs.

CHALLENGES

Navigating global economic uncertainties: While domestic demand remains healthy, uncertainties driven by geopolitical tensions, inflationary pressures in developed economies and tight monetary policies continue to impact investor sentiment, financing costs and construction input costs. Also, global economic and industry trends have a spillover effect on certain key sectors in its core markets, thus impacting earning capacity, consumption trends, consumer confidence among its target audience and thus home-buying decisions. Developers must stay agile in managing exposure to these external variables while safeguarding project margins and timelines.

Adapting to micro-market dynamics with Pune as a strategic focus: The evolving preferences of homebuyers in dynamic markets like Pune present opportunities and complexities. With a growing demand for integrated, amenity-rich and sustainable living spaces, developers must continuously recalibrate their product offerings. Rapid urban expansion, regulatory overlays and divergent demand trends across micro-markets necessitate data-driven decision-making, timely market intelligence gathering and tailored execution strategies to remain relevant and competitive.

Managing escalation in construction costs and labour dependencies: Labour availability and productivity remain inconsistent, especially during peak construction cycles. Managing vendor dependencies, ensuring workforce continuity and adopting cost-efficient construction practices are critical to mitigating cost inflation and maintaining delivery schedules.

Complexity in regulatory approvals and project lifecycle management: Despite improvements in ease of doing business, real estate developers continue to face bureaucratic and administrative delays in securing approvals related to land conversion, environmental clearances and occupancy certifications. These delays can disrupt launch timelines and revenue recognition. Efficient navigation of regulatory frameworks, proactive stakeholder engagement and stronger internal project governance mechanisms are essential to ensure seamless execution and compliance.

THREATS

Complex regulatory frameworks: The Indian real estate sector is subject to extensive regulations and complex regulatory approval frameworks imposed by the central, state and local regulatory authorities. These regulations encompass various aspects, including land acquisition, property transfer, registration and land use. Consequently, obtaining necessary approvals from authorities is a crucial step in project development. Delays in obtaining regulatory approvals can impact project timelines.

Sociopolitical uncertainties: Changes in government policies, such as those related to taxation, land use and urban development, can impact project planning and execution. Political instability at local or national levels can create an unpredictable business environment, which in turn affects long-term planning. Local opposition to projects can result in delays, increased costs and reputational damage.

Industry cyclicality: The real estate market is inherently cyclical and influenced by macroeconomic conditions, supply and demand dynamics, government policies, financing availability and overall market liquidity. The Company mitigates these risks by adopting a diversified business model, which includes owned projects, joint ventures, joint development arrangements and development management across its core markets. However, a significant downturn in the industry or investment environment could adversely affect the business.

Risk management

OVERVIEW

Effective risk management is a cornerstone of the Companys long-term sustainability and value creation. Operating in a dynamic and highly regulated real estate environment, the Company is exposed to a broad spectrum of risks-ranging from market volatility, regulatory changes and execution challenges to environmental and technological disruptions. SPLs risk management framework aims to systematically identify, assess, manage and mitigate these risks. i

KEY RISKS AND MITIGATION STRATEGIES 1. Project execution and delivery risk

Description	Mitigation
Execution delays remain critical, but now also include dependencies on premium product finishes, hyper-customisation and increased project complexity in large, gated communities	• Enhanced deployment of digital construction monitoring tools (enterprise resource planning, building information modelling and project dashboards) to monitor timelines, contractor performance and cost escalations
	• Use of pre-approved vendor panels with service level agreement-based contracts to reduce delivery risks
	• Agile contingency planning is embedded into every project cycle, with tight delivery timelines

2. Regulatory and approval risk

Description	Mitigation
Delays in local body clearances (e.g., environmental no objection certificates and occupancy certificates/ completion certificates) and policy shifts in land acquisition or height/floor area ratio (FAR) norms in major cities	• Active engagement with local authorities and regulatory consultants to navigate complex approval cycles
	• Comprehensive project planning to ensure sufficient time gap for approval to launch and early approval process preparedness for new launches
	• Real-time compliance tracking through dedicated in-house regulatory teams

3. Brand reputation and customer experience risk

Description	Mitigation
In the digital era, even minor delays or post-handover service gaps can snowball into significant brand perception issues, especially with active social media monitoring and RERA scrutiny	• End-to-end CRM updates with milestone-linked communication and service delivery models
	• Proactive customer education on project status, timelines and payment schedules
	• Brand stewardship framework with real-time social sentiment tracking and community engagement

4. Macroeconomic and interest rate risk

Description	Mitigation
Volatile interest rate environments affect construction financing and buyer affordability, especially for mid-income property buyers who rely on home loans	• Active debt portfolio rebalancing towards fixed-rate instruments during rate hike cycles
	• Focused sales mix in mid-premium segments with balanced home loan dependency customers
	• Maintaining adequate liquidity buffers and diversified lender relationships

5. Cybersecurity and digital infrastructure risk

Description	Mitigation
Customer relationship management (CRM) database hacks to data leaks and ransomware attacks	• Multi-tiered cybersecurity protocols including cloud security, firewalls and endpoint protection
	• Regular penetration testing and data governance audits
	• Employee training on phishing, digital hygiene and access control policies

6. ESG and sustainability risk

Description	Mitigation
There is growing scrutiny around ESG compliance, water usage and environmental clearances, particularly in water-stressed cities like Bengaluru and Pune	• Sustainability embedded in design-from solar panels, rainwater harvesting to STPs
	• Targeting green certifications (Indian Green Building Council/Excellence in Design for Greater Efficiencies) across new launches
	• Efficient water management strategies and smart energy systems across all sites

7. Land acquisition and title risk

Description	Mitigation
With limited land bank availability in high-demand urban zones, there is a growing risk related to delays	• Rigorous legal due diligence with multi-level checks
in title due diligence and landowner disputes	• Structured landowner agreements with exit clauses and milestone-based payout terms
	• Dedicated BD and legal teams involved from pre-acquisition to project handover

8. Customer price absorption and demand elasticity risk

Description	Mitigation
In the mid-market and mid-premium housing segments, while demand remains healthy, a sharp surge in home prices-without a corresponding rise in disposable incomes-could impact customers willingness and ability to commit, potentially leading to a slowdown in purchase decisions	• Continued focus on mid-income and aspirational housing with modular pricing and product configurations to enhance value
	• Use of technology and design-led value engineering to control costs and maintain competitive pricing
	• Flexible payment plans and strategic tie- ups with housing finance companies (HFCs) to ease affordability and support customer decision-making

9. Funding and liquidity risk

Description	Mitigation
In a globally constrained capital market, real estate funding-remains selective, accessing the funding at the right time and at attractive rate of interest remains challenging	• Diversified funding sources like public sector undertakings (PSUs), institutional and platform-based capital
	• Emphasis on asset-light models (JDA/DM) to reduce upfront capital commitment
	• Improved internal accruals through operational efficiency and customer collections

RISK MANAGEMENT FRAMEWORK

SPLs risk management framework encompasses the following components:

Risk identification: The Company proactively identifies emerging and existing risks across all business functions- including land acquisition, project execution, regulatory compliance, digital systems, customer engagement, financial management and ESG obligations. Cross-functional risk mapping exercises, input from on-the-ground teams, internal audits and industry benchmarking support this approach.

Risk assessment: SPL evaluates each identified risk based on its likelihood and potential impact, using qualitative insights and quantitative risk assessment tools. The Company assigns risk ratings and prioritises mitigation efforts accordingly. This dynamic approach allows it to anticipate shifts in market, regulatory and operational environments.

Risk mitigation: The Company adopts structured risk response strategies, including:

• Avoidance (e.g., by not entering high-risk geographies)

• Reduction (e.g., through automation, planning and design optimisation)

• Transfer (e.g., via insurance or contractual arrangements)

• Acceptance (where risk exposure is minimal or strategically required)

The Company has embedded mitigation plans into its operational SOPs and periodically tested their effectiveness.

Monitoring and reporting: SPL monitors critical risk indicators (KRIs) in real time through project dashboards, financial controls, regulatory updates and customer feedback platforms. The Company periodically presents risk status reports to the senior management and the Board. Additionally, it holds regular risk review meetings to assess the efficacy of mitigation measures and update action plans accordingly.

Governance: SPLs risk governance structure is led by the Board of Directors and Audit Committee, with delegated responsibilities to senior leadership and functional heads.

A risk ownership model ensures accountability across verticals. The internal audit function plays an advisory and oversight role in ensuring the consistent implementation and control of policies and procedures.

CONCLUSION

SPL has embedded risk management in its strategic and operational decision-making. In a dynamic market where macroeconomic shifts, climate risks, digital disruptions and regulatory complexity are growing, this integrated and forward-looking risk framework enables the Company to protect stakeholder interests and drive sustainable business outcomes.

SPL remains committed to enhancing its risk resilience through:

Digitalisation of risk monitoring

Greater focus on ESG-linked risks and disclosures

Agile decision-making processes

Continuous upskilling of teams on emerging risk domains

SPLs structured, proactive approach positions it to navigate uncertainty and capitalise on emerging opportunities with confidence.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

SPL has established a well-structured and comprehensive internal control framework commensurate with the scale and complexity of its operations. These controls seek to ensure the reliability of financial and operational information, promote operational efficiency, safeguard assets and ensure compliance with applicable laws and regulations.

The internal control systems are periodically reviewed and strengthened to respond to changes in the regulatory environment, operational processes and business risks. Standard operating procedures (SOPs), authority matrices and risk registers are in place across all key functions to provide clarity on roles, responsibilities and escalation mechanisms.

The internal audit, conducted by M/s. Ernst & Young LLP operates independently and follows a risk-based approach. The audit plan, approved by the Audit Committee, covers critical business processes across all key verticals. Findings from internal audits are reviewed by senior management, and timely corrective actions are taken. The Audit Committee of the Board provides strategic oversight and reviews the adequacy, efficiency and effectiveness of the internal control systems regularly.

The Company continues to invest in automation and digital platforms to enhance the effectiveness of controls, improve governance and ensure transparent processes.

Based on the assessments and reports submitted by the internal auditors and the reviews undertaken by the Audit Committee, the Company believes that its internal control systems are adequate and operating effectively as of March 31, 2025.