Sumit Woods Ltd Management Discussions

The following Management Discussion and Analysis (MD&A) is intended to assist readers in understanding Sumit Woods Limited (the Company or Sumit Group), its business environment, strategies, performance, and outlook and the risks applicable to Sumit Group. It should be read in conjunction with our consolidated financial statements and accompanying notes (the financial statements) for the financial year ended March 31, 2026.

Outlook

The global real estate sector entered FY 2026-27 with improving fundamentals. Lower financing costs, stronger institutional capital inflows, resilient occupier demand and increasing focus on sustainability are expected to support continued recovery. While geopolitical risks and economic uncertainty remain key challenges, long-term growth prospects remain positive, particularly across high-growth emerging economies and specialised real estate segments

Internal control and their adequacy

The company has an Internal Audit team and an Internal Control System, supported by an external audit firm and a group assurance team, tailored to the size, scale, and complexity of its operations. Both the Internal Audit team and external reviewers bring extensive experience and expertise in internal controls, operating systems, and standard operating procedures. The system is backed by approved, documented policies, guidelines, and procedures that align with industry best practices to monitor business and operational performance, ensuring business integrity and enhancing operational efficiency. The Internal Audit team regularly assesses the adequacy of the internal control systems, compliance with operating procedures, and adherence to policies, conducting an annual audit of Internal Financial Controls. Based on the internal audit report, process owners implement corrective actions within a specified timeline to strengthen controls. Significant audit findings and corresponding corrective actions are presented to the Audit Committee of the Board of Directors on a quarterly basis.

GLOBAL REAL ESTATE MARKET

The global real estate sector experienced a gradual recovery during FY 2025-26, supported by moderating inflation, stabilising interest rates and improving investor confidence across major economies. While geopolitical uncertainties and economic volatility continued to influence market sentiment, the industry demonstrated resilience with increasing transaction volumes and renewed institutional investment. Investors remained focused on high-quality assets with stable cash flows, reflecting a cautious yet optimistic outlook for the sector.

The industrial and logistics segment continued to outperform, driven by sustained growth in e-commerce, supply chain diversification and increasing demand for modern warehousing infrastructure. Data centres emerged as one of the fastest-growing asset classes owing to the rapid adoption of artificial intelligence, cloud computing and digital transformation. The residential sector remained resilient, supported by urbanisation, demographic growth and persistent housing demand, while prime office assets witnessed improving occupancy as organisations gradually adapted to hybrid working models.

Sustainability and technology remained at the forefront of global real estate development. Developers

increasingly adopted green building practices, energy-efficient designs and ESG-focused initiatives to meet evolving regulatory requirements and investor expectations. At the same time, the integration of PropTech solutions, smart building technologies and data-driven asset management continued to enhance operational efficiency, tenant experience and long-term asset value.

Looking ahead, the global real estate market is expected to maintain its recovery trajectory, supported by easing financing conditions, improving occupier demand and continued investment in infrastructure and sustainable development. Although geopolitical tensions, inflationary pressures and macroeconomic uncertainties continue to pose challenges, the sectors long-term fundamentals remain positive, particularly in high-growth emerging markets, where rapid urbanisation and favourable demographic trends are expected to drive future growth.

INDIAN ECONOMY

During FY 2025-26, the Indian economy continued to demonstrate resilience amidst an evolving global economic environment. Supported by robust domestic consumption, sustained public infrastructure investment, a stable financial system and prudent fiscal policies, India remained one of the fastest-growing major economies in the world. Continued government emphasis on urban development, affordable housing, digital infrastructure and ease of doing business further strengthened the countrys long-term economic outlook and created a conducive environment for the real estate sector.

The Indian real estate sector maintained its growth momentum during the year, driven by sustained demand across residential, commercial and industrial segments. Residential sales remained healthy, particularly in the mid-income and premium housing categories, supported by rising disposable incomes, favourable demographics and increasing preference for home ownership. Commercial real estate also witnessed steady leasing activity, led by the office, retail and warehousing segments, while the growing demand for data centres and logistics parks continued to attract significant institutional investment.

Government initiatives such as the Smart Cities Mission, PM Gati Shakti, infrastructure expansion, metro rail connectivity and continued emphasis on affordable housing played a pivotal role in enhancing real estate development across the country. Regulatory reforms under the Real Estate (Regulation and Development) Act, 2016 (RERA), along with greater transparency and improved access to institutional financing, continued to strengthen buyer confidence and promote an organised and accountable real estate ecosystem.

Looking ahead, the Indian real estate sector remains well-positioned for sustained growth, supported by rapid urbanisation, favourable demographic trends, increasing infrastructure investments and continued policy support. Rising adoption of sustainable construction practices, digital technologies and green building standards is expected to further enhance the sectors competitiveness. While factors such as interest rate movements, inflationary pressures and global economic uncertainties warrant close monitoring, the long-term outlook for the Indian real estate industry remains positive, underpinned by strong economic fundamentals and growing investment opportunities.

MUMBAI REAL ESTATE MARKET

The Mumbai real estate market continued to exhibit resilience and sustained growth during FY 2025-26, reaffirming its position as one of Indias most dynamic and valuable property markets. Demand remained robust across residential, commercial and redevelopment segments, supported

by steady economic activity, infrastructure-led development, improving connectivity and strong end-user demand. Premium and mid-income housing continued to witness healthy traction, while redevelopment projects emerged as a key driver of new housing supply in the city.

The redevelopment landscape in Mumbai gained significant momentum during the year, driven by the limited availability of greenfield land, ageing housing stock and favourable regulatory support. Redevelopment of co-operative housing societies, cessed buildings and cluster development projects continued to create substantial opportunities for developers with strong execution capabilities and established market presence. Homebuyers increasingly preferred modern developments offering enhanced amenities, sustainable design and superior construction quality.

Infrastructure projects, including the Mumbai Metro network expansion, the Mumbai Coastal Road, the Mumbai Trans Harbour Link (Atal Setu), and ongoing road and rail connectivity improvements, continued to enhance accessibility across the Mumbai Metropolitan Region (MMR). These developments positively influenced real estate demand, improved connectivity between key residential and commercial hubs, and unlocked development potential in emerging micro-markets, thereby contributing to long-term value creation.

STATE OF COMPANYS FINANCIAL AFFAIRS

STANDALONE FINANCIALS

During the year under review, the total revenue stood at Rs. 9,654.08 lakhs as compared to Rs. 9,911.32 lakhs for the previous year representing a decrease of 2.59%; Profit before tax stood at Rs. 1,307.06 lakhs for the year under review as compared to Profit before tax Rs. 1,703.97 lakhs for the previous year, representing a decrease of 23.29%; and the total comprehensive income stood Rs. 942.27 lakhs for the year under review as compared to Rs. 1,340.16 lakhs the previous year, representing an increase of 29.69%.

CONSOLIDATED FINANCIALS

During the year under review, your Companys consolidated total revenue stood at Rs. 9,861.48 lakhs as compared to Rs. 14,403.04 lakhs for the previous year, representing a decrease of 31.53%; Profit before tax stood at Rs. 987.92 lakhs for the year under review as compared to Profit before tax Rs. 1,529.82 lakhs for the previous year, representing a decrease of 35.42%; and the total comprehensive income stood at Rs. 592.06 lakhs as compared to Rs. 1,108.84 lakhs for the previous year, representing a decrease of 46.60%.

Opportunities

As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Real Estate in a country like India should remain strong in the medium to long term. Your Companys well accepted brand, contemporary architecture, and well-designed projects in strategic locations for customers and shareholders. Your Company is ideally placed to further strengthen its development potential by acquiring new land parcels.

Challenges

While the management of your Company is confident of creating and utilizing the opportunities, it also

finds the following challenges:

Unanticipated delays in project approvals; Policy alterations; Increased cost of manpower and Technology; Rising cost of construction, Marketing activities; Growth in auxiliary infrastructure facilities; and over regulated environment; Steep increase in interest rates in general and mortgage rates in particular.

COMPANY STRENGTHS

Our Company has been in the real estate business for nearly four decades. Your Company continues to capitalize on the market opportunities by leveraging its key strengths. These include:

Brand Reputation: Enjoys higher recall and influences the buying decision of the customer given our hold on market being more than three decades. Strong customer satisfaction further results in higher premium realizations.

Execution: Possesses a successful track record of quality execution of projects within a reasonable time frame since commencement of any project with contemporary and modern architecture which fulfils the requirement of micro market and potential buyers.

Strong cash flows: Has built a business model that ensures continuous cash flows from their investment and development properties ensuring a steady cash flow even during the adverse business cycles as 90% of our inventory is sold/alloted before the completion of projects.

Significant leveraging opportunity: Follows conservative debt practice coupled with enough cash balance which provides a significant leveraging opportunity for further expansions.

Outsourcing: Operates an outsourcing model of appointing renowned engineers/architects / contractors & professionals that allows scalability and emphasizes contemporary design and quality construction - a key factor of success.

Transparency: As your companys motto states Creating Value, Building Trusts which reflects our strong culture of corporate governance and ensures transparency and high levels of business ethics.

Highly qualified execution team: Employs experienced, capable and highly qualified design and project management teams who oversee and execute all aspects of project development.

Strong Financing: Your Company has had good relations with various NBFCs and Bankers for funding projects in the near past and the company is able to maintain the same status given the current industry scenario.

Focus Points on future growth:

Focus is on middle, upper middle-class group and aspirational class in alignment with the governments aspect to provide housing for all;

Focusing more on project acquisition through joint ventures and development management model with view to achieve asset light model;

Focusing on timely completion of project by adopting new technologies in the field of constructions; and

Your company focuses on various opportunities in Mumbai and Goa in the field of Re-development and development which will ensure robust growth in revenue and profitability of the company.

RISKS AND CONCERNS

Market price fluctuation

The performance of your Company may be affected by the sales and rental realisations of its projects. These prices are driven by prevailing market conditions, the nature and location of the projects, and other factors such as brand and reputation and the design of the projects. Your Company follows a prudent business model and tries to ensure steady cash flow even during adverse pricing scenarios.

Sales volume

The volume of bookings depends on the ability to design projects that will meet customer preferences, getting various approvals in time, general market factors, project launch and customer trust in entering into sale agreements well in advance of receiving possession of the projects. Your Company sells its projects in phases from the time it launches the project, based on the type and scale of the project and depending on market conditions.

Land/ Development rights - costs and availability

The cost of land, forms a substantial part of the project cost, particularly in Mumbai. It includes amounts paid for freehold rights, leasehold rights, fungible FSI, construction cost of area given to landlords in consideration for development rights, registration and stamp duty. Your Company acquires land / land development rights from the government and private parties. It ensures that the consideration paid for the land is as per the prevailing market conditions, reasonable and market timed. Your Company also enters into MOUs and makes advances for the land / land development rights prior to entering into definitive agreements. The ensuing negotiations may result in either a transaction for the acquisition of the land/ land development rights or the Company getting a refund of the moneys advanced. The Company also join JVS for project developments.

Financing costs

The acquisition of land and development rights needs substantial capital outflow. Inadequate funding resources and high interest costs may impact regular business and operations. Your Company has always tried to build sufficient reserves resulting out of operating cash flows to take advantage of any land acquisition or development opportunity.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contain forward looking statements that reflects your Companys current views with respect to future events and financial performance. The actual results may differ materially from those anticipated in the forward looking statements as a result of many factors.